Tunisian economy yet to recover
Tunisians this week celebrate the one-year anniversary of the popular uprising that toppled the country's former leadership. Amidst celebrations, many continue to ask whether economic setbacks since the revolution risk overtaking social gains made by it.
The "Jasmine Revolution," as it has been termed by some, succeeded in overthrowing former Tunisian president Zine Abidine Ben Ali in January 2011, heralding an era of hope for Tunisia's population of 10.5 million. The revolution also sparked a wave of unprecedented popular descent throughout the entire Middle East that would come to be known as the Arab Spring.
In the wake of these historic events, Tunisia has faced a formidable task of maintaining a society based not only on democracy and government transparency, but in financial growth and sustainability as well.
The battle has not been an easy one. One year later, the cost of the revolution to Tunisia's economy stands at between $5-$8 billion—nearly 10 percent of the nation's GDP. Foreign direct development has fallen by 20 percent, and more than 80 foreign companies have shut down their operations in the country.
Tourism, the largest source of foreign income for Tunisia, has drawn to a crawl since the revolution took place. The number of foreign visitors has been cut in half due to fears of unrest, and business has been slashed as resorts that normally cater to European tourists along Tunisia's northern Mediterranean shores stand empty.
Repercussions of Libya's revolution have also taken their toll along with poor economic conditions in Europe, upon which 80 percent of Tunisian trade is dependent.
Tunisia's population has seen unemployment rise to record heights, according to World Bank reports, growing by more than 200,000 since January 2011 and reaching nearly 20 percent in urban areas compared to 14 percent in 2010. In outlying regions, unemployment has hit all time-highs of 50 percent. High youth unemployment, particularly amongst those holding university degrees, is especially troublesome as large number of educated graduates find it impossible to find work.
Tunisian Future in the Balance as Economic Programs Take Flight
Tunisia's new financial reality led its credit rating to fall. And while Standard & Poor's reported that its former rating has the potential to be reinstated in coming months, the news added impetus to the struggle to improve the country's financial standing.
Indeed, following peaceful elections held in October that brought about a new government, leaders vowed to pursue business-friendly policies, put an end to corruption which had cost the country $1 billion annually according to the Global Financial Integrity Foundation, and implement programs to support a modern competitive economy.
Priorities included creating job opportunities, promoting economic activity though fiscal incentives, and policies to revitalize the tourism sector. The government also vowed to make social aid more effective and increase public spending by an estimated 11 percent.
While analysts look at the results with cautious optimism, some indications points to the efficacy of reform initiatives. Tunisia's economy has been growing slowly but steadily from February through December 2011. Inflation has been kept under control, standing at approximately 4.5% at the end of 2011, and foreign exchange reserves maintained. Analysts predict that the economy will grow by 4.5 percent in 2012.
In order to maintain these positive results, leaders will need to set clear goals and firm deadlines for an ongoing financial strategy based on transparency and a strong public sector. That said, it remains to be seen what future months will hold , and whether new policies promoting macroeconomic stability that include wide segments of Tunisian society will finally usher in post-revolution prosperity.
- Al Tayer bucks the US department store trend with Bloomingdale's Kuwait opening
- Gulf Islamic banks set to outperform conventional banks for second year: Moody's
- Jordan secures EU finance for socioeconomic and environmental programs
- Same-day service deliveries in GCC an untapped market: Wing CEO
- Will terror attacks damper Arabs' appetite for European holidays?