Making the Tunisian Resurgence

221 Pages·2019·3.62 MB·English

by  Mahmoud Sami Nabi

Making the
Tunisian
Resurgence
mahmoud sami nabi
Making the Tunisian Resurgence
Mahmoud Sami Nabi
Making the Tunisian
Resurgence
Mahmoud Sami Nabi
LEGI-Tunisia Polytechnic School and FSEG Nabeul
University of Carthage
Tunis, Tunisia
ISBN 978-981-13-3770-3 ISBN 978-981-13-3771-0 (eBook)
https://doi.org/10.1007/978-981-13-3771-0
Library of Congress Control Number: 2018967953
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To the Tunisians across time, striving for justice, peace and dignity,
To my parents, the light of identity shining on modernity,
To my wife and my daughters, the gifts from the Almighty,
To my stepparents and all my family,
To my friends in Monastir, Tunis and globally,
To my colleagues and students in the university,
To all my teachers and professors since the primary.
F
oreword
Mahmoud Sami Nabi offers us a large and ambitious fresco, drawing the
directive lines for an inclusive and sustainable development of Tunisia. He
conducts rigorous diagnoses of the current periods before and after the
Revolution, as well as of the Tunisian economy and its multiple disequilib-
ria. The author analyzes the necessary dimensions for the recovery of the
country and its insertion in an inclusive development path: unlocking
energies, efficient and sound public policies, rebuilding the social contract
linking the state to the social stakeholders, institutional reforms and cre-
ativity, innovative modes of financing, smart integration in the globaliza-
tion and adoption of the knowledge economy as a development platform
guaranteeing a sharable prosperity.
Nabi allies continually a subtle analysis of issues and challenges with
justified suggestions of mechanisms and instruments for their resolution.
Obviously, some of these analyses and proposals might generate critiques
and controversies and possibly divergences. Yet, this is the sign, the proof
of their interest and their substantial contribution to a debate leading to
the social and economic resurgence of the country, at a time where the
multiple crises mining it, are requiring urgent solutions.
Tunis, Tunisia Tahar Abdessalem
19 November 2017
vii
P
reFace
“If the people one day will to live, then destiny must respond, the night must
disappear and the chain must break.” This famous verse was written by the
Tunisian national poet Aboul-Qacem Echebbi (1909–1934) in his poem
Will to Live. At that time, Tunisia was under the French colonization. It is
now part of the country’s national anthem and symbolizes the willingness
of Tunisians to defeat oppression. As the country is emerging from its
“revolution for dignity” (December 2010–January 2011), Tunisians are
still aspiring to a modern and developed country.
One of the triggering factors of Tunisia’s “revolution for dignity” is the
unequal access of citizens to the socioeconomic opportunities. The
Tunisian economy is not inclusive. The economic opportunities are not
available to citizens on the basis of their competencies, ideas or initiatives
but influenced by the wealth of their families and their social and political
connections. Five years after the revolution, social protests emerged again
in many disadvantaged regions of the country fueled by the deterioration
of people’s daily living conditions. More recent ones triggered successively
in January 2016 and April 2017 claiming for credible and concrete public
policies in order to tackle the chronic unemployment, especially among
the youth, and the unequal access to economic opportunities.
The failure of Tunisia in generating an inclusive economic system is the
result of many factors among which are the extractive political regime
under the dictatorship and the underdeveloped institutional environment.
But even in developed countries where institutions are developed, the eco-
nomic system is failing in generating inclusive growth. There are sugges-
tions that advocate the inclusion of ethical dimensions and defend a more
ix
x PREFACE
active social role of the state within the free market economy. I believe that
the debate on the type of the economic system shall not take place on
theoretical grounds. Instead, we have to conceive an integrated develop-
ment strategy encompassing all the dimensions of the society in order to
unlock the dynamism, the creativity and the solidarity of the individuals.
This naturally requires the exploration of new mechanisms and institu-
tional changes to bring inclusiveness, social justice and sustainability to the
economic system. The exercise is difficult in a transition period where a
country like Tunisia is still exposed to threats of violence, social chaos,
spread of corruption, political instability and lack of trust in the political
elite. It is even more difficult in a post-revolution phase where latent diver-
gences among citizens are suddenly emerging. These divergences are
deeply anchored in the society and geographically differentiated. They are
intimately related to the history of the country and to the position of reli-
gion in the society. Therefore, achieving a national identity respectful of
individuals’ opinions and ensuring social cohesion is becoming an
extremely important pillar of the Tunisian development path.
From an economic policy-design perspective, the difficulty of the
Tunisian context is substantial. Despite its small population, the economic
problems of Tunisia are accentuated by the specificity of the political tran-
sition period. The enforcement of law is weakening, corruption is spread-
ing and corporatism is influencing the design of the economic policies.
Hence, no economic solution for Tunisia will emerge without the open-
ness to the multidimensional aspects of the society. Besides, the traditional
macroeconomic policies are not sufficient. It shall be complemented by
nonconventional mechanisms and instruments enabling public institu-
tions to play their strategic role in complementarity with the private
sector.
My aim in this book is to investigate the current socioeconomic issues
and challenges facing Tunisia and to suggest mechanisms and instruments
for their resolution. Therefore, this book is not of pure economic analysis.
I believe, like many economists,1 that focusing on economic issues solely
1 Ronald Coase affirms that economists shall reorient the field of economics to the study of
man as he is and the economic system as it actually exists, taking into consideration the cul-
tural, institutional and organizational diversities (Ronald Coase, 2012). Ronald Coase
(2012) “Saving Economics from the Economists,” December 2012, Harvard Business
Review.
PREFACE xi
is far from being sufficient to conceive a development strategy. At the
opposite, we have to explore the multidimensional aspects of the society.
In the first chapter, I analyze the roots of the revolution and the post-
revolution situation of the country from a political sociology perspective.
I particularly investigate if the country is becoming more cohesive after
the revolution and what are the main challenges it faces from this perspec-
tive. Chapter 2 is dedicated to a detailed diagnosis of the Tunisian econ-
omy before and after the revolution. I particularly focus on the various
binding constraints preventing it from escaping the middle-income trap.
In Chap. 3, I present the current economic reforms’ agenda and pinpoint
the institutional bottlenecks that are preventing the successive govern-
ments from escaping the post-revolution vicious circle.
In Chap. 4, I explore the pillars of an inclusive development strategy
that a country like Tunisia shall pursue. I particularly examine three mul-
tidimensional approaches of change and development. First, I present
Kaplan and Freeman’s (2015) approach for a successful inclusive reform
during a political transition. Then, I examine the multidimensional devel-
opment theory of the Tunisian philosopher Abderrahmane Ibn Khaldun.
Finally, I look at the multidimensional development paradigm of the lau-
reate of the Nobel Prize in economics, Joseph Stiglitz. I dedicate special
sections at the end of this chapter to the building of inclusive institutions
and the reinvention of leadership on the institutional ground, in order for
Tunisia to progress on the path of socioeconomic transformation toward
a modern and inclusive country. This institutional dimension is crucial to
Tunisia which shall conceive its development strategy taking into account
its strengths and weaknesses on a multidimensional space. This is the rea-
son why I assign an important place in this chapter to the reengineering of
institutions and to the role of leadership in the country’s transformation
process.
In Chap. 5, I continue the exercise of developing an integrated inclu-
sive development strategy that would unlock Tunisia’s economic poten-
tial. I particularly emphasize (1) the need to modernize the Tunisian state
and reengineering its role, (2) the importance to develop a new social
contract, (3) the urgency to immunize the Tunisian economy against the
political instability, (4) why a pluralistic approach of economic develop-
ment is timely, (5) how urgent is reforming the Tunisian economy to
make it open, fair and more productive, (6) why the economy needs to
modernize its judicial and property rights systems and finally, (7) how
important is the positive disruption of the financial system.
xii PREFACE
The economic transformation of Tunisia requires the activation of new
financial channels beyond the traditional ones in order to raise the neces-
sary financial resources. As noted by the Asian Development Bank, the
governments shall explore diverse sources of finance (public and private,
domestic and international) and combine it coherently around shared
agendas (ADB, 2015).2 My intention in Chap. 6 is to shed light on a
variety of nontraditional mechanisms and instruments to mobilize finan-
cial resources. I begin by exposing the benefits of various mechanisms of
securitization including an original mechanism I tailored for the Tunisian
context. Then, I defend the opportunity to develop equity finance,
crowdfunding and trade finance. In a third section, I suggest a noncon-
ventional monetary policy based on targeted quantitative easing (TQE)
coupled with securitization. I dedicate a special section to the role of
participatory banks in improving access to finance and the potential of
coupling cooperatives and microfinance in generating jobs for youth.
Finally, I motivate the opportunity to utilize an emerging financial instru-
ment at the international level, the Social Impact Bonds, to unlock the
philanthropic potential of Tunisia and channel it to support governmental
social programs.
Tunisia is already connected to the global economy through many
regional and bilateral free trade agreements, hosting international firms,
and has been for a longtime one of the main touristic destinations in the
Mediterranean basin. Yet, one of the main drivers of a successful economic
transformation of Tunisia shall be an intelligently better integration into
the global economy. This dimension is analyzed in Chap. 7, where I
explore how Tunisia shall enhance methodically its integration into the
global economy. I recall the “flying geese” catching-up process that char-
acterized the development strategies of East Asia and motivate the oppor-
tunity for Tunisia to inspire from it, while conceiving its proper process
coupled with a well-tailored industrial policy. An important place is also
given in this chapter to the role of the state in facilitating the integration
of the Tunisian small and medium enterprises (SMEs) in the global value
chains. A second important dimension that Tunisia shall consider in rela-
tion to its integration into the global economy is the external financial
liberalization. I present the current situation of the capital account
2 ADB (2015) “Beyond the MDGs: Technology, Finance and Statistics to Unlock
Sustainable Development in Asia Pacific,” News Release, 28 May 2015.