Toward a new social contract in Tunisia

On October 12, 2015 two events took place in Tunisia. The first was the much-heralded and well-deserved Nobel Peace Prize awarded to the Tunisian National Dialogue Quartet—composed of the Tunisian General Labor Union (UGTT), the Tunisian Confederation of Industry, Trade, and Handicrafts (UTICA), the Tunisian Human Rights League, and the Tunisian Order of Lawyers. The prize was given for the Quartet’s help in establishing a political process when the country “was on the brink of civil war.” The announcement sent a message not just to Tunisia: “this year’s prize will contribute toward safeguarding democracy in Tunisia and be an inspiration to all those who seek to promote peace and democracy in the Middle East, North Africa, and the rest of the world.” Justifiably proud, Tunisians celebrated, but many also soberly noted that much work, especially on the social and economic front, remains.

The second event that took place on that day was the death of a young Tunisian street vendor who died in a hospital in Sfax. He had set himself on fire after the contraband cigarettes he was trying to sell were seized. The event immediately brought to mind the self-immolation in December 2010 of the young university graduate Mohamed Bouazizi, who made a living selling fruit. He killed himself in protest against police harassment—a tragedy that galvanized the Tunisian people and led eventually to the end of the Ben Ali regime and to revolts elsewhere in the Arab world.

The more recent tragic death of a young Tunisian in a politically very different country underlined the country’s economic and social challenges.

The economy is struggling. Real GDP grew at 2.3 percent in 2014, after 2.4 percent in 2013 and is estimated at 1 percent for 2015. Unemployment is at 15.2 percent, above the pre-revolution level of 13 percent. Setbacks in mining, parts of agriculture, and tourism—reeling from terrorist attacks—are expected to adversely affect living conditions in rural areas, where poverty is concentrated, and in pockets of urban poverty where employment prospects are deteriorating. Youth unemployment stands at 40 percent, and especially glaring is the unemployment rate of Tunisian university graduates; it takes an average of six years for a university graduate in Tunisia to find a stable job and by age 35 half of all university graduates in the country are still unemployed. In the meantime Tunisia’s 800,000 public sector employees received a $47 dollar raise last April with a $25 increase set for January 2016, and with public sector wages at 13.5 percent of GDP—one of the highest rates in the world—the whole proposition is clearly unsustainable.

The implicit social contract that governed Ben Ali’s Tunisia was, broadly speaking, one where the state promised employment for many, social services, a path to the middle class via education and the enforced stability of an autocracy, all with the understanding that citizens would stay away from meaningful political participation. The Quartet’s prize celebrated the demise of the political side of the old social contract. The revolution also highlighted the crony-infused economy of the period as regional disparities, high unemployment (including for the educated), a huge public sector wage bill, and corruption made clear the contract’s unsustainability. The focus now needs to be on developing a modern economy led by the private sector with a level playing field for all—an economy inclusive in its reach to Tunisians in all regions.

The good news is that the process that the Quartet started foresaw a platform to advance on the social and economic front: the National Council of Social Dialogue, a tripartite entity designed to bring together the government, labor in the form of the UGTT, and the private sector via UTICA. The cabinet approved the draft law on the Council in June 2015. The actual membership may or may not be increased; that very political decision and a date for the meeting have yet to be decided.

Not surprisingly, labor represented by the UGTT and UTICA’s businessmen have very different views on the future of the Tunisian economy, while the coalition government is preoccupied with security concerns and wary of significant reforms at a time of perceived fragility.

Yet one could also argue that the raucousness of a new democracy with its demonstrations, sharp rhetoric, and inefficient bargains also points to resilience that only an open democratic system can bring. After all, this is probably the single most legitimate and representative government in Tunisia’s history. It is no longer the hard but eventually brittle state that existed five years ago. It is messy indeed at times, as all democracies are, but ultimately responsive and inclusive. Foreign support is critical and despite global shortfalls and donor fatigue, much more focus on Tunisia is needed, especially at a time when billions are going to regimes that have made less progress towards openness and pluralism.

The reality is that a transition period beckons and the focus should be on lessening the potential negative impacts of the transition, especially on the poor. The OECD, among others, warns against using public sector jobs for social appeasement, but calls for an unemployment insurance system, extending and better targeting cash transfer programs for a basic safety net, public works programs, etc. Tunisia does not lack for competent bureaucrats, unionists, and business people, and these and other ideas from within the country and abroad will inform Tunisians as they use the Social Dialogue platform and others to create an economy commensurate with their democratic polity. Business as usual should not be the response of the international community.