Olin Wethington writes: On December 21, Tunisia completed a remarkable democratic transfer of power, with the election of Beji Caid Essebsi, the leader of the secular political party Nidaa Tounes (Call of Tunisia).
Given concerns about security and the fate of the democratic transition, economic issues were essentially put on hold in both elections. Now it is time for Tunisia’s leaders to put the economy at the top of their agenda.
In the coming weeks, Nidaa Tounes, which won 86 of the parliament’s 217 seats, will face a difficult decision as it attempts to form a government. to share power or piece together several small parites.
The new government will have to act quickly. The country’s moribund economy has fueled public disillusionment. Unemployment is falling, but it remains high, at more than 15% – and higher still among the young. The fiscal and current-account deficits are widening, foreign investment is weak, inflation is rising, and corruption remains rampant. Tunisia’s political achievements could rapidly be reversed if the new government cannot quickly revive the economy and improve citizens’ daily lives.
Nidaa Tounes must take the lead in forging support from all major parties for a national-unity agenda on economic reforms. In its first 30 days, the new National Assembly should publicly announce a consensus vision for economic growth and job creation.
There is already broad agreement among the major political parties on the necessary priorities: bringing public spending under control, encouraging private-sector growth and employment, promoting regional development and social inclusion, and investing in essential infrastructure. In the previous assembly, work stalled on several significant pieces of legislation, including laws on public-private partnerships, foreign investment, and banking reform.
The program developed by acting Prime Minister Mehdi Jomaa in September 2014 deserves serious consideration. The International Monetary Fund Stand-By Arrangement of 2013 provides a similar starting point. To maintain support from the IMF when its current program ends in summer 2015, Tunisia will need to negotiate new commitments. A consensus reform package could serve as a credible point of departure.
In the meantime, Western democracies must do their part and sustain engagement with Tunisia. The 2011 Deauville Partnership with Arab Countries in Transition, in which G-8 members pledged to support Arab countries’ efforts to move toward “free, democratic, and tolerant societies,” has a role to play. This mechanism may be unlikely to mobilize significant new financing, but participating countries can provide valuable political and technical support on structural reform, regional integration, and private-sector development.
An early consensus within Tunisia on a credible economic agenda would open the taps of the largest potential source of capital: international financial markets. The incoming funds, and the subsequent growth and job creation, would undergird the consolidation of democracy – and thus help cement the impressive gains that Tunisia has made so far.
