Economic struggle in Tunisia endures

In the two years since an uprising overthrew the Tunisian president Zine El Abidine Ben Ali, the new democratically elected government has struggled to improve the job prospects for young people.

Artists hold candles during a demonstration outside the headquarters of the General Union of Tunisian Workers in Tunis. Anis Mili / Reuters

TUNIS // Stamping their feet and huddling in leather jackets to keep warm, the few dozen people clustered outside the national trade union in Tunis breathe clouds of mist into the winter air and hold forth on deeply held grudges.

"We have both political and economic grievances," said Amine Ben Ammar, who works in a call centre. "The ordinary people went to the streets because they cannot buy milk...and politically, some people are being arrested with no reason, it was the same as under Ben Ali."

He and the other men and women here in the chilly shade belong to a union that has been a thorn in the side of successive Tunisian regimes and have all participated in marches of thousands of people in recent weeks.

In the two years since an uprising overthrew the president Zine El Abidine Ben Ali, the new democratically elected government has struggled to improve the job prospects for young people that were a key driver of anger, while food prices have risen dramatically. Attempts to encourage international investment have languished as reform to cumbersome business laws stall and persistent strikes spook businesses.

The government, distracted, some analysts say, by political disputes in the capital, has failed to put in place significant job creation, and unemployment remains stubbornly high, especially in the countryside. Rural towns such as Siliana, Gabes and Sidi Bouzid, the cradle of the uprising, have all seen big marches and strikes in recent weeks.

Unemployment has reached 18 per cent. Many of those out of work are young and university educated but with skills better suited for the bloated public sector than private industry.

"Practically and theoretically, the Ennahda party that was elected, they have followed the same economic and political choices as Ben Ali," said Ibrahim Ben Talaba, a young academic and leader of the Communist party, referring to the moderate Islamist party that dominates the interim government. "Today, after one year of Ennahda, what happened in Siliana, Gabes and Sidi Bouzid are the second phase of the same revolution with the same demands."

Yet, some signs of improvement have emerged. Economic growth is tipped to reach 2.7 per cent this year after receding 1.8 per cent last year in the wake of the revolution, according to the IMF.

Tourists have begun to tentatively return after being scared off during the unrest. Manufacturing and foreign investment have also picked up. But the overall growth rate is below the trend of 5.3 per cent in the years before the unrest and the global financial crisis. Economists fear the rate is also insufficient to create jobs.

Some businesses also complain about instability, and part of the uncertainty is political. Tunisia's transition process will only be complete after general elections in June next year. Until then, some investments are likely to remain on hold.

"Business is still going down," said Olfa Dhaoui, the managing director of Royal Delicies, a pastry producer and retailer in Tunis. "Regulations and strikes are still affecting business and the economy is overall still flat as people are not going out to spend." Tunisia slipped five places to 50 in the latest World Bank's Doing Business report, with restrictions on opening a business among the areas where the country fell back.

Excessive red tape around business helped to trigger unrest in Tunisia two years ago. Mohamed Bouazizi, a Tunisian street vendor, set himself on fire on December 17, 2010 in protest at having his vegetable cart confiscated by authorities because he did not have a permit.

If Tunisia is to move towards a sustainable economic future, easing rules to help businesses create jobs will have to be a priority.