Long understood to be a peripheral North African Arab state hugging the Mediterranean shoreline, street vendor Mohammed Bu Azzizi’s December 2010’s self immolation became the proverbial spark that catapulted Tunisia into the forefront of change in the Middle East/North Africa Region.
Today, the Arab World is again looking towards Tunisia as it seems to many to be the greatest hope for a stable Arab democracy in the immediate term.
The country is in the midst of its first presidential election that is heading to what is expected to be an extremely close runoff between the secularist Nida Tounes Movement party led by Beji Caid Essebsi, an experienced politician with ties to the former regime, and the conservative Congress for the Republic party led by interim president Moncef Marzouki.
However, three years into Tunisia’s democratic transition, the same systemic factors that helped cause the 2010/2011 revolution remain unfixed. Tunisia’s economy remains one of massive potential but over-regulation has caused it to stagnate.
Tunisia’s future president will have a challenge in restoring the country’s economic prospects. During the previous decade, Tunisia’s GDP experienced continual rapid growth, peaking in 2007 at over six percent. In the aftermath of the Arab Spring and the global economic crisis, the economy has stalled, experiencing a negative GDP growth rate in 2011 and under three percent growth in 2013. With employment at over 15 percent of the population – one third of whom are young university graduates, plans to quickly improve the country’s economic prospect is an imperative to safeguard the country’s political gains.
Unlike many countries in political transition, Tunisia’s stale economic growth figures and high unemployment issues aren’t caused by lack of investor confidence, rather they are due to poorly designed economic policies put in place by the former regime, which have cost the Tunisian economy up to five percent annual economic growth according to the World Bank.
For Tunisia’s fledging start-up ecosystem, government policies are inhibiting entrepreneurs’ abilities. For instance, a World Bank study shows that 50 percent of the country’s economy is subject to high entry restrictions. A Stanford University study finds that simply registering a business in Tunisia takes on average nearly half a year. Similar studies have found that Tunisian startups struggle to obtain through an arduous process financing as well, and when they do it’s expensive, costing about nine percent.
Yet, despite all these challenges Tunisian youth remain keenly open to entrepreneurial opportunities. A recent survey conducted by the Centre des Jeunes Entrepreneurs found that 54 percent of those between ages 20 and 30 indicated a desire to create their own business. Just in the past few years, business accelerators have opened to cater this interest. These include WikiStartup , Tunisia’s first business incubator aimed at fostering a culture of “business creation in Tunisia by supporting the development of highly-promising startups”.
The international community recognizes the importance of jumpstarting the entrepreneurial ecosystem in Tunisia as well. For instance, Qatar is in the process of delivering on its pledge of $100 million to establishments working to develop entrepreneurial culture in Tunisia. The United States Department of State has created a $20 million enterprise fund for the country, and the USAID has an $8 million project to train some of Tunisia’s most promising hi-tech entrepreneurs.
Despite the international support and inherent culture of entrepreneurship amongst its youth, if Tunisia’s government does not begin its own efforts in fostering an entrepreneurial ecosystem to help fix its struggling economy, its political achievements remain vulnerable.