Tag Archives: Tunisia

Working on Its Own Development: Visiting a KnowHow Mentee in Tunisia

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Louis Delcart is the Director of Internationalisation and Innovation at  VOKA – Flanders’ Chamber of Commerce Halle-Vilvoorde. He is serving as a mentor to the Chamber of Commerce and Industry of the Centre through CIPE’s Knowhow Mentorship program. 

Tunisia is, for us Europeans, a touristic paradise, like Spain or Turkey. But it is also a country with an ancient civilization, dating from centuries before: Queen Dido, Hannibal and the Carthaginians, Pompey the Great and his African conquests, the Beys of Tunis and the corsairs attacking European ships from the pirates near Mahdia. They all are part of 3,000 years of rich history.

It was also in this country that the Arab Spring started in 2011. Within three weeks time, the popular uprising chased out the country’s autocratic leader, Ben Ali. A democratic process was started, with the election of Ennahda, a moderate Islamic party, to power. After three years, the love of the people for its new government is over. But Tunisia’s subsequent political development has been different from its neighboring countries: a technocratic interim government was recently formed and a new constitution is being edited, discussed, and voted on article by article in the parliament. Tunisia is – at least to this point — not missing its turn towards democracy.

It is in this context that I was invited by CIPE to mentor a chamber of commerce in this country. I was given a choice between two regional chambers, and I selected the one with the most elaborate strategic plan, the Chamber of Commerce and Industry of Centre (CCI-Centre) in Sousse, which made me curious.

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Asking the Right Questions to Promote Entrepreneurship in MENA

Entrepreneurship is increasingly touted as a key ingredient to economic growth, job creation, and expanding opportunity, particularly for youth and women, in the Middle East and North Africa region. As a result, the number of initiatives supporting entrepreneurship in the region has increased exponentially, particularly following the Arab Spring.

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The Youth Unemployment Crisis in Tunisia

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Like many Arab Spring countries, Tunisia is experiencing a “youth bulge,” but neither that nor the lingering effects of the European financial crisis can entirely explain Tunisia’s high rate of youth unemployment.  Youth unemployment in Tunisia is the result of structural issues in its education system and its labor market, as well as an ingrained understanding of “employment” based on decades of social and political development.

While talks between Tunisia’s political parties dominate the headlines, the emotional political debates going on right now belie troubling economic conditions that could prove just as debilitating to the country’s democratic transition.

Today, the unemployment rate in Tunisia among young people with a university degree is 30 percent, more than twice the 2005 rate of 14 percent. The spike in overall unemployment (now at 17 percent) is partly explained by the larger political and economic situation. Since Tunisia’s 2011 revolution, the economy has had a hard time regaining its pre-Arab spring growth rates.  Al Qaeda’s presence in North Africa has grown in the last few years.  Instability in neighboring Libya has only added to anxiety over the security situation in Tunisia, a country traditionally boasting healthy tourism revenues.  Finally, demand for Tunisian exports has dried up in the European Union, Tunisia’s most important trade partner. These are well-known elements of Tunisia’s post-revolution narrative.

That’s just part of the equation, though.  The European market may right itself, the Tunisian government may reassert its ability to secure the country, but Tunisia will still face the nagging issue of high unemployment among its young graduates. That 30 percent unemployment rate among recent graduates isn’t a result of just cyclical unemployment—from regional and global fluctuations—but structural unemployment.

According to the most recent Global Competitiveness Index from the World Economic Forum, the Tunisian labor market has failed to efficiently marshal its young talent to create jobs and growth.  A seemingly concise diagnosis, but, when unpacked, it reveals a few phenomena that have combined for the perfect storm of youth unemployment: a gap between labor supply and demand, a prohibitively rigid labor market, and lingering cultural assumptions about self-employment and entrepreneurship.

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Tunisian Partner Wins Award for Best Global Entrepreneurship Week Social Media

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This March, participants from 135 nations gathered in Rio de Janeiro, Brazil for the 2013 Global Entrepreneurship Congress. First held in 2009, the annual event brings together entrepreneurs, leading thinkers, researchers, and policymakers to celebrate entrepreneurship, in particular the successes of Global Entrepreneurship Week (GEW).

Every November, delegations from around the world, from Ghana to Turkey to the United States, organize GEW events that give future entrepreneurs the chance to expand their professional networks, better understand their countries’ business environments, and practice important skills, such as giving a pitch for a new business. Through partnerships with universities, community organizations, and businesses, Global Entrepreneurship Week teaches individuals how to create successful businesses that will support not only themselves and their families, but their nations’ economies.

In recognition of national committees’ outstanding achievement in organizing GEW events, the Global Entrepreneurship Congress bestows awards for most partner organizations, most activities, and best overall campaign.  And the winner of this year’s Buzz Builder Award for best use of social media?

That would be Tunisia. Led by CIPE partner IACE (l’Institut arabe des chefs d’entreprises), the Tunisian committee generated more social media support for its achievements during the 2012 Global Entrepreneurship Week than any other delegation, no small feat for a country of about 10.6 million people.

IACE’s Center for Young Entrepreneurs, whose year-round programming supports the next generation of Tunisian entrepreneurs, took the lead in organizing Tunisia’s Global Entrepreneurship Week. GEW Tunisia events demonstrated the diversity of the business community and gave future entrepreneurs the information and tools they will need to start their own businesses.

The Center for Young Entrepreneurs produced a video to celebrate a successful GEW: in six days, 5,000 people participated in 80 activities across the country in support of entrepreneurship. Promoting the video through their website and Facebook page, IACE and the Center for Young Entrepreneurs went up against delegations from fifteen other countries—including Mexico, the United Kingdom, Pakistan, and the United States—to eventually win the 2012 Buzz Builder Award.

Tunisian society is no stranger to social media. In 2011, videos and images of protests in Tunisia quickly spread throughout North Africa and the world via YouTube, Facebook and Twitter. The ensuing revolution and ouster of the longtime regime set an example for similar regime changes in Egypt, Yemen, Libya, and elsewhere.

Almost two years later, IACE’s Center for Young Entrepreneurs invited the youth that sparked the Arab Spring to explore empowerment through entrepreneurship.  Inspired by changes in the region, Tunisians are clamoring for not only political but economic agency. With engaging, informative activities like Global Entrepreneurship Week, IACE is giving Tunisian youth the tools to transform their passion and ability into real economic opportunity.

Peru’s Lesson for the Middle East and North Africa

Hernando de Soto

One of the first people to walk through the doors after CIPE’s founding in 1983 was Hernando de Soto, President of the Institute for Liberty and Democracy (ILD) in Lima, Peru. Mr. de Soto had the fundamental insight that poor people were not part of the development problem but instead part of the solution. In his best-selling books, The Other Path and The Mystery of Capital, he explained how the lack of access to property rights and other institutions of a market economy keeps the poor in most developing countries trapped in the informal sector.

In one of its first-ever programs, CIPE teamed up with de Soto and ILD to begin bringing the poor in Peru from the extralegal economy into the formal economy and the rule of law. As a result of ILD’s unique and innovative property rights and business reform program, Peruvian society received $18.4 billion in net benefits between 1992 and 1997, including saving formalized urban owners some $196 million in red tape costs.

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Should Corruption be a Human Rights Issue?

Graffiti in Tunisia. (Photo: Foreign Policy)

The link between corruption and human rights abuses seems to many to be self-evident: when laws are up for sale and justice has a price tag, a citizen’s treatment by the government is determined more by the ability to pay than by fundamental principles of fairness and respect for the rule of law. But can systemic corruption be considered a violation of human rights on its own? In Tunisia, the country where endemic economic injustice set off a wave of revolutions in the Arab world, activists are making exactly that case.

A commission established soon after the January 2011 revolution to investigate the economic dealings of ousted Tunisian dictator Zine el Abidine ben Ali uncovered a pervasive and highly structured network of corruption. The most lucrative parts of the economy were doled out to favored relatives and associates, while the machinery of government – banks, tax authorities, and the justice system – became tools to reward cronies and punish dissenters, part of what writer Sarah Chayes calls a “diabolically intrusive system of state corruption” and Tunisian activists call “economic crimes.”

Perhaps most importantly, average citizens were locked out of most economic opportunities altogether. Indeed, it was the 2011 self-immolation of Mohammed Bouazizi, a Tunisian fruit vendor worn down by the petty indignities of everyday corruption, that kicked off the Tunisian revolution and the whole Arab Spring that followed.

Now, Chayes writes, Tunisian anti-corruption campaigners want to expand the definition of gross violations of human rights to include “systemic economic crimes” like those perpetrated by the Ben Ali regime. If they are successful, their campaign could have enormous implications for how other countries fight against corruption.

Most academics and policymakers already agree that pervasive corruption can undermine various human rights, or lead indirectly to human rights violations. But the idea that systemic corruption is a human rights violation in itself would immediately raise its profile as an international issue, as well as potentially bringing the machinery of international human rights law to bear on fighting it.

This could mean that states have an obligation to fight corruption, and that failure to do so would also be considered a human rights violation. It would provide certain legal remedies outside of national legislative and enforcement mechanisms, which, in places affected by systemic corruption, will often be a part of that corruption.

The approach is not without risks. For one, the international community might not embrace a new human rights obligation built around a concept like “corruption” that can take many forms, and is difficult to define or prove to be happening. More importantly, it could also obligate the international community to act when a country fails to fight corruption effectively enough – a task that many governments around the world struggle with.

However, such a dramatic change in human rights doctrine may not be necessary. The Tunisian activists themselves are simply hoping for a public national reconciliation process similar to those in South Africa or Rwanda, not a major shift in international law. And human rights campaigners are already beginning to focus more on the role that corruption plays in facilitating human rights abuses.

Still, it is important to stress that corruption – especially the systemic, all-encompassing kind found in Tunisia, Egypt, and too many other countries around the world – is more than just a nuisance. Left unchecked, it can spark a revolution.

The other transition

Egyptians in Tahrir Square during the presidential election (Andre Pain/European Pressphoto Agency)

The turmoil engulfing Egypt’s presidential election has been a stark reminder of the difficulties the Arab Spring countries face with challenging political transitions. In countries where democracy has little precedent and where popular will was long suppressed, the new political opening has brought much anticipated civil liberties but also juxtaposed competing forces and diverging interests. Yet, among all the attention that headlines give to the political process, the story of another equally crucial transition – economic one – is often lost.

It is important to keep in mind that the roots of MENA revolts were both political and economic in nature, including demographic pressures, inefficient public sector, and constrained private sector. In other words, the lack of political freedoms was compounded by the profound lack of economic freedoms. That in turn fueled unsustainable levels of government employment and swelled the ranks of young people like Tunisia’s Mohammed Bouazizi who, without other viable options, strive to earn a meager living in the informal sector. A year and a half after Tunisia ousted its long-time authoritarian ruler, political transformation is underway but the economy struggles.

Many Tunisians who rose in protest against Ben Ali are disappointed with slow progress of reforms. Protestor Beshar Messaoud recently interviewed by NPR says that, economically speaking, things are exactly the same and the government has brought no solutions to the problems that led to the revolution in the first place. Unemployment is officially at 18 percent but it may actually be twice as high. Another interviewee, 35-year-old Laila Turki adds that if Tunisia doesn’t get its act together and improve its economy quickly, it will undermine its chances to build a functioning democracy.

But there are many misconceptions about what is needed for the economy to improve. For one, demands for economic change often focus on populist calls for more entitlements with little consideration given to how a sound economy capable of delivering sustained prosperity to its citizens can be built. What is more, the very understanding of what a true market economy entails has been tainted by decades of crony capitalism in the region. As a recent post on the Institute of Economic Affairs’ (IEA) blog points out, the meaning of “pro-business” in MENA has been warped: the “pro-business” policies of authoritarian leaders were limited to only one type of businesses – the ones connected to the government. That’s not the same as being pro-market, which requires allowing economic freedom for all segments of the society and building institutions that enable competition on a level playing field.

Instead, MENA ruling elites built systems that monopolized economic rents and jealously guarded their own economic privileges. That, in turn, necessitated the suppression of not just freedom of political expression but economic freedom as well. The legacy of that system is clearly visible in Egypt today. During the rule of post-independence leaders Gamal Abdel Nasser, Anwar Sadat, and Hosni Mubarak – all military men – the military has amassed a huge business empire in sectors from agriculture to electronics. Current estimates show that military-connected enterprises account for 10 to 40 percent of the Egyptian economy; meanwhile, more than 40 percent of Egyptians continue to live on $2 a day or less. Therefore, the real question of Egypt’s political transition is whether the formal return to civilian rule will translate into meaningful boost to pluralism on the economic front (pun intended).

The same goes for transitions in other MENA countries as well. Their success will depend on the degree to which the economic undercurrents of political turmoil are better understood and more effectively addressed, and the degree to which the misconceptions about the nature of market-oriented reforms are overcome. As the IEA blog emphasizes, a deeper reflection on the central place of the entrepreneur in economic development is needed, since “the future of the Arab Spring depends on the capacity of the new democratically elected governments to implement measures to prevent crony capitalism, restore the rule of law and promote economic freedom, in order to ensure general prosperity.”