Tunisia must address economic woes to avoid unrest spilling over

Tunisia has stood out as a model of relatively peaceful democratic change amid Arab turbulence. But the tumult that rages just below the surface – from churning labour unrest to the explosive Salafist riots which attracted angry marginalised youth – are a clear sign that the social and economic causes of the Arab spring have not subsided.

The revolution brought major political changes but the economic devastation of the struggle, coupled with the side-effects of the European economic downturn, are helping undermine confidence in the new government. Tunisian president Moncef Marzouki recently warned that if the new number one priority, the Tunisian economy, is not fixed, there will be a "revolution within the revolution".

Tunisia is not yet on the brink of another full-blown "Arab spring". Neither the large political parties nor big labour are itching for another showdown. But to contain growing economic and social unrest, prime minister Hamadi Jebali and his team must address three key issues.

First, they have to tackle unemployment, particularly that of jobless university graduates, who have been taking to the streets since January 2011.

Second, Tunisia needs to address stark regional disparities that deprive interior and peri-urban areas of economic development.

Third, the government must act decisively to prevent the corrupt practices of the previous regime's patrons from simply changing hands to new practitioners of equally devastating, if less flagrant, corruption.

Jebali's government, led by the moderately Islamist Ennahda party, is fully aware of the problems. But so far it has failed to keep apace of demands for change since the October 2011 elections, in which Tunisia's more economically marginal populations propelled "uncorrupted" but untested revolutionary parties into the ruling coalition at the expense of the better-known politicians perceived as "tainted" by their accommodations with power. Only by experiencing some measure of prosperity will these more revolutionary workers and unemployed youths see the benefit of their protests.

All is far from lost. Despite the recent moves to fire the of the head of the central bank, Tunisia's financial institutions are working competently and companies are functioning. While tourism was hit hard, it is slowly recovering. The Tunisian government has introduced some successful stopgap measures, including modest allocations for some 200,000 unemployed graduates, tens of thousands of public works jobs, and massive subsidies for staples like milk, eggs, semolina, sugar, and fuel. The trick will be to build on these economic foundations without overly stirring up new demands that will delay public and private sector recovery.

To get the ball rolling, the government must implement more far-reaching social and economic policies. First, the National Constituent Assembly should launch emergency procedures to break down administrative barriers that are keeping jobs from university graduates and hindering regional development.

One way would be to set up a commission to rapidly approve projects that address those key problems. Committees of inquiry made up of local mediators and security forces could also be launched to resolve violent local conflicts, particularly in the poorer western and southern regions, the mining basin and depressed peri-urban areas. Following local consultations, ministries and local authorities should then be empowered to follow up on the recommendations.

Most Tunisians, like most labourers in the region, work in the informal sector. This sector needs to be transformed from underground status into an engine of growth. Red tape and humiliating treatment that stop Tunisians like Mohamed Bouazizi and three dozen unfortunate self-immolating copycatters from earning a living should end. Informal sector activities should be mainstreamed without loss of livelihoods. Eventually, these workers will contribute to the tax base of the new economy, fostering government accountability. The state should simplify procedures to start and run a small business, and Tunisia should develop local venture capital capacity.

A clear and complete registry of unemployed diploma holders should also be created, coupled with transparent and objective criteria for getting jobs in government and public and private businesses. Several riots, even intra-clan violence, have occurred over unfair hiring practices.

For their part, trade unions should focus on labour training and retraining, to help people understand the need to resolve disputes through collective bargaining and develop new skills demanded by the global economy. Meanwhile the international community could support regional and local development, helping with technical assistance and expanding micro-credit lending capacity.

The need for effective economic action cannot be overstated. Parties are already repositioning themselves ahead of the next presidential and parliamentary elections. As they do, social unrest may well grow, and, combined with political and identity issues, could boil over into a full blown legitimacy crisis for the government.

At the heart of any set of solutions should be greater consultation and dialogue with all stakeholders. After years of authoritarian rule, and months of protests and economic hardship, the people of Tunisia deserve nothing less.