A forum held by IACE in May 2016. (Photo: Kapitalis.com)
By Ali Ayadi, Pam Beecroft, and Brenna Curti
In 2015, Tunisia’s business community, government and civil society worked together to overcome a series of political and security crises that almost derailed their grand democracy experiment, and won a Nobel Prize for their efforts.
Now it is the economy that needs an intervention. Instead of transforming and growing, it has been sliding backward. The Tunisian dinar is losing value, public debt is mounting, inflation continues to rise, and unemployment grows daily. Corruption and cronyism are rampant, spreading injustice and slowing growth even more.
As Tunisians lose faith in their leaders, discontent is fueling new social unrest. Violence and terrorism have added new layers of economic woes, virtually wiping out tourism and resulting in $4 billion for economic recovery being diverted to cover national security needs.
It is no exaggeration to say that Tunisia’s democratic future hinges on fixing all this. For one thing, if citizens are worried about basic survival, they cannot focus on elections and civic groups and all those other things that keep leaders accountable and democracy vibrant. For another, Tunisia needs the spirit of enterprise itself – economic dreams, hard work, innovation, and entrepreneurship – to create the prosperity citizens need.
That is why CIPE’s long-time partner, the Arab Institute for Business Leaders (IACE, in French) has joined with one of the Nobel prize winners, the Tunisian Union for Industry, Commerce and Crafts (UTICA), as well as the Tunisian Union for Agriculture and Fisheries (UTAP) and the government, to get Tunisia’s economy back on track. With CIPE support, they have launched a “National Business Agenda” (NBA) – a CIPE process that helps the private sector consult local businesses, identify economic priorities and advocate government to improve the economy through reforms.
Tunisia’s NBA is – like Tunisia – taking a unique form. In some ways, they are ahead of where many countries begin. Government is already on board for the NBA and seeking the private sector’s help. Several reform priorities are also already identified and work is underway.
They are also facing the specific challenges of a sinking economy and rising insecurity. There is enormous urgency and pressure on all sides for the NBA to yield visible results quickly. Tunisia’s NBA is therefore not the usual single-stream progressive process, but a set of simultaneous short-, medium-, and long-term efforts.
There are three pillars: the first will use a mobile phone application by which businesspeople report immediate, local problems, so the government can achieve some “quick wins.” The second will ensure the government has input on urgent reforms, and the third pillar focuses on the more “classic” NBA approach of consultation and reform identification for the future.
Which brings us to IACE’s latest publication, the ALECA Private Sector Perception Index – part of the second pillar mentioned above, which analyzed how different parts of the business community see the free trade agreement Tunisia is negotiating with the European Union, called the Accord de Libre Échange Complet et Approfondi (ALECA). (Read a draft English translation of the Index here.)
IACE and CIPE surveyed more than 500 businesses of various sizes and sectors – including industry, agriculture, and services – on their attitudes in four different areas, to create a composite “ALECA-friendliness” score. The first research area asked for feedback on sectoral competitiveness levels in the local market and in foreign markets; the second measured understanding of the free trade agreement; the third measured perceived long- and short-term impact of the agreement on their business and their sector; and the fourth measured overall favorability of the agreement.
The survey revealed that the industrial sector had an overall “ALECA-friendliness” score of 76 out of 100, which is twice the agricultural sector’s score of 37. Additional interviews with agricultural enterprises revealed that a large portion of these business leaders were wary of trade liberalization and do not feel ready for exposure to international competition.
Service sector businesses were somewhere in the middle, with an overall “ALECA-friendliness” score of 59. The industrial sector was also significantly better informed and acquainted with trade liberalization than all other sectors of the Tunisian economy.
There are several reasons that this index matters and is worth a look. First and foremost, despite the impact trade has on business, it is the first survey in Tunisia of the private sector’s views on ALECA. And index results bring home the fact that there is not one “private sector” in Tunisia, but many – something not acknowledged by policy makers thus far, and which could have an impact on negotiations and their outcomes. At the very least, it is clear that some sectors need more information on the ALECA process if the government wishes their support, and that liberalization, protection and other issues may need to be further discussed.
The index is also a major step in the NBA effort itself, and reinforces the productive relationship between public and private actors. IACE has proven that information from real everyday citizens – not just experts – can produce actionable information the government can use to ensure policies, including the ALECA, produce the best outcomes possible for Tunisia’s citizens. IACE will now continue to update the index every six months to get the private sector’s opinion on several issues related to the trade agreement.
Lastly, in a way, it shows how far Tunisia has come in its democratic journey overall. The index represents the “new normal”– one where think tanks produce issue-based work, and where the government uses that work to understand citizen priorities and design policies that are informed by what the people want and the country needs. In other words, it is a small piece of democracy in action. This, within an NBA process that could not have been imagined in Tunisia even five years ago.
Ali Ayadi is the Country Representative for CIPE in Tunisia. Pam Beecroft is a Senior Program Officer for the Middle East & North Africa for CIPE. Brenna Curti is a Program Assistant for the Middle East & North Africa for CIPE.
