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Tunisia: ‘Democracy startup’?

On February 3 President Obama called the new Tunisian prime minister, Mehdi Jomaa, to congratulate him on his inauguration, saying, “The United States will continue to be a friend and partner to Tunisia to support its democratic transition, to bolster security, and to promote a more peaceful and prosperous future.” He then invited Jomaa to Washington.

This week Jomaa began his U.S. tour. On April 1 he met with Google CEO Eric Schmidt before stopping by Columbia Business School for a chat with students and professors. In his speech, during which the above clip was taken, he emphasized the need for foreign investment in Tunisia’s “democratic transition.”

With an ease of a statesman he delivered a calculated speech on the current situation in his country. He made sure to mention that Tunisia was close to Europe and the United States, and that it could be a “hub for investment.” He explained that the economy and security were his top priorities and said, “We have to start some reforms for our economy … for reforms we will need to make sacrifices at the beginning.”

In the question-and-answer period he was asked, “Why should foreign investors come to Tunisia?”He replied, “I don’t like to speak about Tunisia as a spring Arabic country, but as a democracy startup, democracy and business startup. That’s how I would like to promote Tunisia.”

Jomaa himself has a background in business. He was trained as an engineer, and for two decades he oversaw Hutchinson Aerospace, the defense subsidiary of the oil-and-gas giant Total. After spending time abroad, he returned to Tunisia to serve as minister of industry.

For most of last year, the Constituent Assembly — the transitional body charged with creating a new constitution — was plagued by infighting exacerbated by two high profile assassinations of left opposition leaders.In the fall all parties sat down for a “National Dialogue.” The ruling Islamist party, Ennahda, amidst widespread popular criticism, ended the talks by ceding power. It agreed to install a compromise transitional cabinet. As a consequence, Mehdi Jomaa was nominated for the position of prime minister, which he assumed in January. He has been called by many a “technocrat” due to his lack of “political” experience, but he seems comfortable in his new role.

On April 2, Jomaa traveled to Washington to begin a “U.S.-Tunisia Strategic Dialogue,” which the U.S. State Department called “an opportunity for the United States and Tunisia to advance our shared interests and further the strong friendship between our countries.” While in the capital, he has met with members of Congress, the World Bank and the International Monetary Fund.

Christine Lagarde, managing director of the IMF, said after meeting with Jomaa:

The IMF will continue to support Tunisia in the implementation of its economic program through financial support, policy advice, and technical assistance. I look forward to a continuing productive engagement with Mr. Jomaa and his team.

Since the revolution, Tunisia has taken $1.8 billion in loans from the IMF. The latest disbursement of $500 million was secured after Mehdi Jomaa’s nomination.

On January 28, the Tunisian Central Bank signed a letter of intent to the IMF with structural reform stipulations. It states that the “effective implementation” of the loans

remains dependent on new implementation decrees that will be ready by March 2014 (new structural benchmark) and will adhere to the principles of liberalized access to the markets, reduced restrictions on investment, simplification of the rules for repatriating capital, and the rationalization of exemptions. Moreover, the law on competition is being finalized and will reduce state intervention in the economy, relaxing excessive regulations, and strengthening competition among companies.

The agreement also includes austerity measures to be imposed on the already impoverished Tunisian population. It calls for a scaling back of the social pact, which had increased funding for public sector workers. In addition to payroll audits, the agreement also goes after pensions. It states, “The government continues to give absolute priority to the reform of pension schemes.”

The UGTT, the largest trade union federation in Tunisia, and a key partner in the National Dialogue, has expressed criticism of the loan agreements. In an interview with Al Monitor, Sami Tahri, deputy secretary-general and spokesman for the UGTT, said, “We did not give the government a blank check.”

Henda Chennaoui, an independent journalist working with Nawaat.org, explains:

Jomaa is taking advantage of the crisis and insecurity. It’s not only him. All the ministers have the same background as him. They’re all technocrats coming in to focus on contracts. These are people who know how to do business discretely, too. … There’s nothing new here. The previous governments all did the same.

Mehdi Jomaa and his cabinet, filled with African Central Bank and U.N. appointments, is following in a long legacy of partnerships and neo-liberal reforms. President Habib Bourguiba collaborated with the IMF and World Bank in the late 1970s. His structural reforms resulted in inflation of food prices and the bread riots of 1984. It was this crisis, and the rising tensions with Islamists, that created an environment for Zine El Abidine Ben Ali to take power in a “bloodless coup” in 1987.

Ben Ali, during his two decades in power, also worked with the IMF and World Bank, and his administration was a hub for corruption. A new World Bank report, All in the Family: State Capture in Tunisia, outlines how the family received 21 percent of all private sector profits in the country. According to Bank Watch,

Tunisia is already paying off debts generated under the Ben Ali regime to France and several multilateral development institutions such as the World Bank, the African Development Bank and the European Investment Bank.

For Fathi Chamkhi of RAID, a Tunisian anti-debt organization, 85 percent of the E.U. debt payments are for debts accrued under Ben Ali.

While those in power have changed, the economic dictator has remained constant. The IMF and World Bank have continued to manage the economy of Tunisia, despite the influence of Russia, China, and the Gulf States in North Africa. Today, Mehdi Jomaa will meet with Obama and discuss the “democratic transition” and make his pitch for the new startup. It won’t be a hard sell. There’s a skilled and well-educated workforce, debts to be repaid and a sympathetic government in place.

Henda Chennaoui said, “Mehdi Jomaa doesn’t represent me. He doesn’t represent anyone in Tunisia. To give power to the people, that’s the only democracy. We expressed this on January 14.”