Wednesday, August 14, 2019

How crony capitalism resulted in the 2011 Tunisian Revolution

Photo by AK Rockefeller
The cause of the 2011 Tunisian Revolution can be largely attributed to the crony capitalism led by the dictatorship in Tunisia. Capitalism creates opportunities for honest gains, but also opportunities for the abuse of power, as occurred in Tunisia. We have seen the consequences of this since in protests and civil unrest in the country. The revolution was part of a wider uprising, the Arab Spring. In this blog post I will discuss why the Tunisian Revolution was the first country to revolt against its dictator.

Tunisia began large-scale reforms of its economy under the guidance of the IMF and World Bank after the economic crash in the early 1980s. These were neoliberal reforms, including trade liberalization, financial liberalization, price liberalization, and privatization. Tunisia thereby increased its links with the rest of the world particularly in the local North African and Arabic region, and with the EU. El-Said and Harrigan (2014) explain that the citizens of Tunisia were initially protected from volatile prices and markets by the large social spending of the government, and superficially these reforms appeared to be successful, as major economic indicators improved for the country. However, there were issues associated with the implementation of these neoliberal policies.

The economic reform was selective and politically mediated. This was exposed by the report “All in the Family: State Capture in Tunisia”. It showed that the Ben Ali clan, consisting of family members of Ben Ali, owned 662 firms in Tunisia. Ben Ali clan associated firms accounted “for less than 2% of all wage jobs”; they produced “5% of all private sector output”, and absorbed “16% of all net private sector profits” (Rijkers et al., 2014: 11. This shows that when the economy was reformed the clan members moved in to dominate the profitable sectors of business in Tunisia without creating jobs.

Furthermore, the dictatorship did not want the private sector to grow as it viewed successful independent business as a threat to its rule; this is significant as the private sector is the primary channel for job creation in a neoliberal capitalist economy (Malik and Awadallah, 2013). It is therefore not surprising that at this time there was also high youth unemployment due to a lack of available opportunities. Unemployment for those aged from 15 to 24 had consistently been at around 30% from 1991 to 2010 (World Bank, 2019). The Ben Ali clan created deep socio-economic issues in Tunisia.

The youth population was also increasingly educated, however the economic structure had not developed in Tunisia to meet demand for qualified jobs. “The limited economic opportunities that did exist were rationed by connection rather than competition”, and consequently there was a feeling of grievance for the youth that saw “little hope for economic and social mobility” (Malik and Awadallah, 2013: 297).

It became the case that to succeed in business, individuals either needed to be very close to the regime, or very far away (Malik, 2014). As a consequence of this, the Tunisian informal sector developed rapidly. The informal sector of an economy is the unregulated markets – for example street vendors. It was the suffocation of the informal sector that began the revolution.

On the 17th December 2010 Mohamed Bouazizi, who worked as a street vendor, set himself on fire after a dispute with local authorities it was widely reported that he was regularly harassed by the local police and unfairly taxed and abused (Ryan, 2011). It was this event that ignited the revolution. There were protests in Sidi Bouzid, Mohamed Bouazizi’s hometown, and they quickly spread around the country. Tunisia had previously been a place where there was little freedom of speech. It was a self-policing society that did not speak out against the regime (Issawi, 2012). Mohamed Bouazizi’s death set the protesters free to take issue with the wider faults of their society.

On 14th January 2011 Ben Ali’s presidency came to an end when he fled to Saudi Arabia. Following this, Prime Minister Ghannouchi resigned, responding to demands by demonstrators calling for a clean break with the past. In October 2011, Parliamentary elections were held and the Ennahda Islamist party won, but fell short of an outright majority. Following this, in December 2011 a new president and a prime minister were elected. 

Since then new problems of Islamic conservatism and extremism have arisen, which have created new issues and divisions in the region. This has reduced focus on the issues that crony capitalism has caused in Tunisia. here has been continued corruption, as individuals have sought to be well positioned to take the privatised resources that are being released from state control (Ayaria, 2014). This is reinforced by the report on ‘Political Connections and Tariff Evasion’, which states that since the revolution, “tariff evasion in Tunisia has escalated” (Rijkers et al., 2015: 32). Consequently, crony capitalism is still a significant issue even in the absence of the Ben Ali clan. Furthermore, unemployment for those aged from 15 to 24 as of 2018 was still very high at 35% (World Bank, 2019). Clearly this indicates that the issues that caused the revolution have not been resolved. We should therefore expect more protests in Tunisia in the future.

Edward Gill

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