After turmoil in Tunisia, hopes are high for the future

When I arrived in Tunisia this month, I found a country in disarray.

Factories had been burnt to the ground during the mass protests that ousted Zine el Abidine Ben Ali from the presidency in January. Shattered store windows were a common sight on the main Bourguiba Street in downtown Tunis. Tourism had ground to a halt. The political system was a shambles, with elections for a constitutional congress slated for July but little in the way of an order in place.

As the conditions make abundantly clear, the future for Tunisia's economy and business environment remains uncertain. Yet today's unsettled, chaotic atmosphere masks what I came to see as the country's possible long-term promise. Believe it or not, little Tunisia could set an example that other countries where protests have flared may find hard to follow. While the dust has yet to settle, the Tunisian situation also illustrates that economic outcomes for countries caught up in the wave of Arab unrest could vary widely.

The reasons for optimism about Tunisia are simple. With between 10 million and 11 million people, the country is small, which makes managing its growth and deciding where to allocate resources a little easier. More important, though, its population is well-educated, with more than 90 per cent of school-aged children enrolled and many older students in university. Some of its best and brightest are educated at France's top schools.

And the infrastructure for an economic revival is to some extent already in place. Tunis has an up-and-coming financial district on the north shore of its large lake, where the Tunis Stock Exchange opened its new headquarters in December.

European companies are already using Tunisia as an outsourcing hub, setting up software development businesses and other high-tech outfits to take advantage of an educated population that demands lower wages than workers at home. What is more, legal structures are similar to those in France, giving foreigners a greater degree of comfort.

"It's the same text as in France," Jean-Francois Vermont, a French entrepreneur who set up a software development operation in the eastern city of Sfax several years ago, told me. "It's the same architecture of rights, of law. Everything was the same, so I concluded it was very easy. I had to just create a company as I would have in France, so immediately I said let's do it."

Moncef Cheikhrouhou, a prominent Tunisian economist, told me that helping Tunisia become an even bigger outsourcing hub in the Arab world akin on a small scale to India was his "secret dream" and was a goal that democracy would help the country achieve. Accomplishing this type of goal will be a lot easier in Tunisia than in, say, Egypt.

The latter's economic revival will be more complex and harder to manage because the country does not have the advantage of the head start Tunisia has in areas such as education and legal structures. Egypt also has the Arab world's largest population, which inherently makes a consensus on policies for economic growth harder to reach.

None of this means, of course, that Tunisia is bound to be an economic success story, or even that it will necessarily fare better than Egypt. The optimism that followed Mr Ben Ali's fall could easily be replaced by a post-revolutionary ennui when people come to realise that resolving high youth unemployment and other critical issues takes longer and is more complex than they originally hoped.

My point, rather, is that Tunisia at least has the ingredients necessary for good things to happen, a view that the IMF seems to share. As Masood Ahmed, the fund's regional director, told me via e-mail: "With improved governance and transparency in the economy, the allocation of resources could become more efficient and lead to larger investment. Together with a well-educated workforce, this could contribute to enhancing potential growth over the medium term."

Realising the country's potential is contingent on a variety of factors, among them the formation of a stable new government, policies that promote economic openness and the general health of the global economy. Talk to Tunisia's business leaders and young entrepreneurs, though, and it's hard not to hope.

Mohamed Amine Ouni, a student at Esprit, one of Tunis's top universities, told me he was planning to start a business once he graduated, a process that would be made easier by the absence of corruption after Mr Ben Ali's departure.

He recently participated in a "Start-Up Weekend" where young Tunisian entrepreneurs exchanged ideas and thought about how the environment for new businesses would change in a post-Ben Ali world.

People such as Mr Ouni are Tunisia's best assets. The question is how well the country's emerging political order can use them.

"There are a lot of people going out to get their independence and assume responsibility to work in a co-operative way, thanks to technology, thanks to web 2.0, thanks to social networking, thanks to everything," Mr Vermont said. "We will see a liberation of productive forces."

Will that actually happen? The basic conditions are in place, it would seem, but the future is far from certain.