Tag Archives: Tunisia

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.”

One Year Later: Cause for Hope in Tunisia

Tunisians celebrate Ben Ali's departure.

Tunisians celebrate Ben Ali's departure. (Photo: AP)

One year ago on January 14, Zine el-Abidine Ben Ali, who had ruled his country for nearly two and a half decades, boarded a plane to Saudi Arabia, fleeing a people who had overcome their fear of him. Despite little personal experience in their history to justify their faith, broad segments of Tunisian society responded to the pervasive uncertainty that followed by remaining committed to democracy. While enormous challenges remain, that commitment is ample reason for optimism.

Upon his flight, Ben Ali left more questions than answers. On the day he departed, the presidency changed hands twice. When police withdrew from the streets of Tunis, rioting and looting ensued. The newly minted “national unity” government fractured in days. Weeks passed and Rachid Gannouchi, founder of an-Nahda, Tunisia’s largest political party, remained in exile. Members of Ben Ali’s Democratic Constitutional Rally (RCD) party lingered in the halls of power for a month before protests pushed them out. It took two months before the RCD was killed by the stroke of a pen.

As it became increasingly apparent that an-Nahda would fare well in elections, some feared that the party would roll back civil liberties. Some warned that while Tunisian military officers initially shied away from political power, a difficult transition, or perhaps one that empowered Islamists, might change their minds. Some criticized the transition for proceeding too slowly. Some criticized it for moving too fast. Protests, demonstrations, and strikes continued, challenging an economy that had underperformed even when the going was good. Throughout, the question remained: if not Ben Ali, then what?

Facing myriad challenges, Tunisians have been remarkably consistent in their answer. Broad segments of society have remained steadfast in their commitment to establishing a democracy. Despite being hailed as national heroes, Tunisian generals have largely left politics and policymaking to civilians. Thousands of Tunisians ran for office. Millions went to the polls.

When an-Nahda earned 40 percent of the vote, the other 60 percent did not incite revolt. Rather than taking its electoral mandate and running roughshod over its defeated opponents, an-Nahda, apparently conscious that its mandate will expire in one year, appears to prefer compromise and consensus-building. While points of contention abound, Tunisians seem committed to the idea that democracy offers them the best system in which to resolve them.

While this is cause for optimism, celebration would be premature. This year will bring a set of challenges that could shake the resolve of Tunisians. The recently elected Constituent Assembly has one year to draft a constitution and ensure that it enjoys robust support. The high stakes surrounding this process could certainly pose a challenge. Furthermore, reconciling the corruption that plagued many of Tunisia’s government institutions with a newfound focus on transparency, accountability, and the rule of law could be painful.

Perhaps just as importantly, Tunisia’s new leaders must resuscitate the country’s stagnant economy. A recent string of self-immolations has highlighted the urgent nature of the problem. Three weeks ago, Tunisia’s new president warned that if the country cannot revive its economy, it may be headed for “collective suicide.”

According to a recent paper written by economist Lahcen Achy and published by the Carnegie Endowment, Tunisia has long suffered “because of political interference in business, many administrative and regulatory barriers, and ineffective social and regional redistribution mechanisms.” Achy called on Tunisia’s new government to “devise a consistent package of policies, relying on a credible discourse, concrete goals, a timetable to achieve them, and accountability to the population.”

Building consensus among an evolving group of nascent democratic forces to draft a constitution that garners widespread support, while simultaneously reforming and jumpstarting a struggling economy in a post-revolutionary environment, would be challenging in a good year. In 2012, with its neighbors to the north struggling economically and its neighbor to the southeast trying to recover from a civil war, it will be more so. Still, with the faith Tunisians have shown in democracy to this point, there are plenty of reasons to be optimistic.

Tarek Mohammed Bouazizi: Entrepreneur and Inspiration

As the fourth annual Global Entrepreneurship Week is underway we would be remiss not to recognize Tarek Mohamed Bouazizi, the Tunisian entrepreneur whose frustration and self-immolation inspired protests throughout the Middle East.

Bouazizi was a produce vendor in the town of Sidi Bouzid, in central Tunisia, who at the age of 26, was the sole breadwinner for his family.  As the owner of a small business operating in the informal sector, he was subject to repeated police harassment, excessive fines, demands for bribes, and the confiscation of his goods and equipment.  With no recourse to defend himself, the harassment caused  humiliation and despair.  On the day Bouazizi lit himself on fire, a policewoman effectively put him out of business by confiscating his produce and weight scale.

Renowned Peruvian economist and reformer Hernando de Soto recently authored an article in the Financial Times, where he illustrates the institutional barriers that kept Bouazizi out of the formal sector, leading to the abuse by the Tunisian authorities. According to de Soto it would have taken Bouazizi 142 days and $3,233 to register his business.  The $3,233 is roughly 12 times his monthly net income.  Bouazizi was also unable to buy a truck to expand his business, since he could not record the deed to his family home in order to use the property as collateral.

As Egyptians and Tunisians begin to grapple with the complicated issues of constitution writing, electoral laws, and the role of Islam in the political sphere, they should not lose sight of the circumstances that led them here.  Issues such as property rights, access to capital, and fair treatment under the law all have enormous effects on people’s daily lives as Bouazizi and the revolutions in the Middle East this year have emphatically demonstrated.  Entrepreneurship, the ability to start and build one’s own business, has the potential to be a driving force behind economic growth in the Middle East.  The entrepreneurial energy and desire exists, but governments in the Middle East should seek to facilitate rather than hinder this enterprising spirit.

This story also appeared on the Community of Young Entrepreneurs blog.

Less is more: Constitution building in Tunisia

(photo: JJ Emru)

Over the weekend, almost four million Tunisians came out to elect members to the Constituent Assembly that will create Tunisia’s new constitution. There is already plenty riding on these elections. As the first free elections in Tunisia’s history, they should go a long way in reassuring Tunisians that their transformation is really moving forward, even if it has been messy and troubling at times.

Just the fact that elections happened at all is inspiration for many countries in the region. They provide a practical model for Libya and Egypt. They up the ante for leaders in Jordan and Morocco, who have launched tentative reforms, but many so far only on paper. And in places where real change seems far on the horizon, these elections may give hope to activists that their struggles will achieve the freedom they seek.

Even more now rides on the future constitution itself. All Tunisians, including the country’s diverse private sector, must be involved in the process. It is a one-shot, historic opportunity to pave the way for freedom, growth and prosperity.

Simple is best with documents that determine the course of nations. The art of developing a good constitution lies in the details, and in keeping most of them out of it. Good constitutions are broad enough to have lasting relevance, and flexible enough for the future. They should enshrine the basic principles, relationships and structures that will underpin all laws and institutions to follow.

The specifics should be left for later, for policymaking processes designed to adapt relatively quickly to the will of the people and their changing needs. Otherwise, a country will have to address its political questions through a continual process of national referendums. This is inefficient and costly to say the least, and likely to cause civic fatigue among even the most ardent citizens.

To be lasting and useful, the Tunisian constitution should define openings and avenues for all citizens. What is should not do is guarantee outcomes – constitutions that have, for example, promised every citizen a job, have rarely held up very well. Tunisians who own businesses will want to look for many of the same constitutional principles as everybody else. With an eye towards the future, the private sector should ensure the new constitution provides a framework that allows all citizens to have a voice in lawmaking, exercise their rights, build their businesses, hold decision-makers accountable and have access to impartial adjudication of disputes.

That means they should be looking at, among other aspects: the policymaking process, who can initiate the process and who has input when; the independence of the judiciary to decide cases and sanction wrongdoers; the balance of powers between the executive and the legislative branches; citizens’ freedoms and rights; and particularly the right to own and dispose of property.

Laws can be changed over time, and there will be many opportunities to advocate for their improvement if they do not come out right the first time. The constitution, on the other hand, is for forever – ideally anyway. Business associations should join forces with other civil society groups to gather and channel the input of citizens, monitor the Constituent Assembly’s activities, and provide support and information that will lead to a constitution that works.

Draw inspiration!

CIPE’s editorial cartoon competition is still ongoing! Inspired by recent global events? Interesting things going on in your country? As the Middle East is on everyone’s mind, here is an interesting cartoon published on the Cartoon Movement website by Egypt’s Sherif Arafa:

The interesting thing about the cartoon is that the caption poses a question on whether Tunisia will inspire others. The author is Egyptian. The cartoon was

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