BDC Snapshots: Tunisia’s persistent economic woes may endanger its fledgling democracy

Ten years after the revolution which toppled Zine El Abidine Ben Ali’s regime, youth groups and security forces are clashing as violent protests against economic hardship sweep across Tunisia.

Despite significant advances in terms of political and civil freedoms, Tunisia’s economic outlook has not improved. Some indicators, such as the Bertelsmann Stiftung’s Transformation Index (see figure), show a deterioration in economic performance. The situation has been exacerbated by the coronavirus pandemic, which has led to economic contraction, decreased state resources, and increased poverty. The government’s ability to respond is hindered by major structural issues, including a huge fiscal deficit which widened to an estimated 11.5 percent of gross domestic product in 2020. Unemployment, a major trigger of contestation, reached 16.3 percent in the third quarter of 2020- higher than it has been in seven years. Going forward, the government must heed IMF calls to liberalize the economy and reduce the fiscal deficit, which will require it to control the wage bill and limit energy subsidies. These steps will likely lead to widespread discontent and further protests. The government must therefore also keep the security response under control. If the security response is too robust and escalates, it may endanger Tunisia’s fragile democratic process.

^{Source: Bertelsmann Stiftung Transformation Index (BTI) Dataset, “BTI 2006-2020 Scores,” accessed January 26, 2021, https://www.bti-project.org/en/meta/downloads.html.}

^{Note: The Political Participation Index (1-10, with 10 representing the best score) measures the extent to which a country has free and fair elections, effective power to govern, association/assembly rights, and freedom of expression. The Economic Performance Index (1-10, with 10 representing the best score) measures how a country’s economy performs, based on quantitative indicators such as GDP, Purchasing Power Parity, inflation, unemployment, foreign direct investment, current account balance, public debt, etc.}