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Islamists eclipsed.

THE MASS TRIAL LAST August of Islamic militants marked the culmination of the Tunisian government's campaign to crush Ennahdha (Renaissance), the fundamentalist party which though illegal has been able to draw on widespread popular support. Its leadership is now either in prison, in exile or has simply given up. "I honestly see no point in carrying on," one former Ennahdha official was quoted as saying last summer. "We entered into direct confrontation wanting to take over and we lost. I see no prospect of any change now."

In the short term, perhaps not. The regime of President Zein al Abidin Ben Ali has managed to keep tight control of the domestic political situation and seems under no threat in 1993. But the economic grievances which have fuelled unrest (particularly unemployment among the young) still provide ample ground for dissidence. While effectively suppressing Ennahdha, the regime has so far provided no alternative legitimate channel for criticism.

This is not entirely its own fault. The ruling Rassemblement Constitutionel Democratique (RCD) has all the seats in parliament, largely because the secular opposition has proved to be ineffectual and divided. The biggest opposition party, the Mouvement des Democrates Socialistes, has broken up into several factions while the rest of the opposition is equally fragmented. The trade union movement, led by the Union Generale Tunisienne du Travail, has been refused permission to form a political party of its own which might carry some weight.

If he is to defuse the threat of civil disorder in the future, President Ben Ali must pay more than lip service to the promise of gradual democratisation he held out after coming to power in 1987. On the other hand, the non-government parties must show themselves to be a credible rather than squabbling and self-indulgent opposition. If neither side evolves, Ennahdha will rise again.

The major test will be legislative elections due in 1994. The government agreed in December to introduce a system of partial proportional representation which will make it easier for non-RCD candidates to enter parliament.

Political immobility contrasts sharply with the regime's enthusiastic efforts to liberalise and rationalise the economy and throw off the shackles of the Bourguiba era. A structural readjustment programme was launched under the aegis of the IMF in the mid-1980s and been largely successful. It should be possible to make the dinar fully convertible by 1996.

Further public sector reform, substantial increases in government saving to release more resources into the private sector and a reduction in the budget deficit to 1.1% of GDP by the end of the 1992-1996 plan period (as against an estimated 2.7% last year and 2.3% this year) are the chief priorities for the next few years.

The progress of liberalisation has been slow, but will take a considerable step forward when Tunisair is partly privatised. Meanwhile, a concerted effort is being made to encourage foreign investment in order to stimulate the growth needed for the urgent creation of new jobs.

Like Morocco, Tunisia hopes to benefit from its closeness and privileged trading relations with the European Community to lure European firms to set up on its soil. In this respect, again like Morocco, one of Tunisia's most outstanding features is simply that it is not Algeria. It boasts an increasingly open economic environment, can offer cheap and relatively skilled labour for European firms and enjoys free access to the EC for almost all its locally manufactured goods.

But the Tunisian economy will remain vulnerable in three crucial areas - tourism, agriculture and oil. The tourist industry earned $1,037bn last year, bouncing back from the 1991 low of $770m when foreign visitors were frightened away from the Middle East because of the Gulf crisis. The recovery was impressive, but underlines the volatility of tourism as a hard exchange earner.

Agriculture has been another success story in recent years. The cereal harvest was a record 2.4m tonnes in 1991 and 2.2m tonnes last year. It may be somewhat lower in 1993 but, more important, the recent experience of Morocco is a reminder of the Maghreb countries exposure to the risk of drought.

Oil poses a more serious problem. Oil output in 1993 is set to fall to 5.02m tonnes from 5.35m tonnes in 1992 as production from the large Ezzaouia and Ashtart fields declines. Foreign companies are actively involved in exploration and development of new fields, but all of them are relatively small. Unless there is a major new find, oil exports will decline inexorably.

Tunisia

GDP: TD 12.1bn; $13.3bn GDP per capita: $1,470 Population: 8.4m GDP growth: 7% (1992); 5% (1993) Inflation: 6% (1992); 6% (1993)

* The political mood has been muted since the imprisonment last summer of 265 Islamic fundamentalists on charges of threatening the security of the state. But militant Islam is far from being eliminated even though most of its active leaders now operate from abroad. The chief fear is that fundamentalist discontent will spill over from Algeria.

* The economy grew strongly in 1992, boosted by a good agricultural performance, increased tourism receipts and a rise in oil finds are insufficient to maintain the current rate of exploitation and phosphate output is constrained by contraction of the market. Textile exports will also face growing competition from Eastern Europe.

* Investment activity is tailing off as the number and value of new projects declines. But another good year for agriculture will keep inflation under control.
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Title Annotation:Tunisia's political and economic prospects
Publication:The Middle East
Date:Feb 1, 1993
Words:909
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