The World Economic Forum recently named Tunisia the most competitive country in Africa. The Global Corruption Report for 2001 found Tunisia to be not only the least corrupt nation in North Africa (a dubious distinction, to be sure) but also the third least corrupt state in Africa as a whole. Foreign investment, around $400 million in 1997, topped off at $1 billion in 2000 before falling back to $700 million in 2001.

Nor has human development been ignored in favor of GDP growth: 91 percent of the minor population is literate, and the rate of population growth has been held to 1.15 percent. (Contrast this number with Syria at 2.5 percent, Jordan at 2.9 percent and Morocco at 1.68 percent.) Over 80 percent of the population own their own homes. The life expectancy of 72.4 years is the highest in Africa. All citizens have government health insurance. About 6 percent of Tunisian GDP is allotted to education, 99 percent of children eligible for primary school attend and 75 percent of secondary school age children are enrolled. Notwithstanding its Francophone past, English is compulsory in schools after age 13, and computer training is offered in most schools.

Still, the economic challenges are significant. Unemployment hovers around 15 percent and will stay so for the next three years. The tourist boom has collapsed, and the anemic world economy has increased pressures on the export economy. In particular, the textile sector, which comprised over 40 percent of the export economy in past years, has drastically suffered.

In 1998, Tunisia began to implement the Euro-Tunisian Association Agreement that was designed to drop all customs duties between Tunisia and the EU by 2010. Specifically, Tunisia is committed to a structural adjustment program, the so-called mise à niveau. This will require it to meet EU manufacturing and service industry quality standards and improve both the quality and competitiveness of Tunisian manufacturers. The EU agreement demands painful introspection by the Tunisian business and manufacturing community. One commentator has suggested that "the portion of industrial production threatened by the removal of import controls from the EU has been estimated at 60 percent." Still, Tunisia leads the pack of EU Mediterranean "partners" in meeting its structural adjustment benchmarks, notwithstanding the pressures such economic rationalization places on the economy.

Tunisia's concern for social stability makes it acutely sensitive to the costs (and often real pain) of the "structural readjustment" so often required by economic modernization. A good example is the National Solidarity Fund. The 2626 Fund, as it is informally called, was created in 1992 to involve all members of society in the fight against poverty. The fund consists of voluntary (although strongly encouraged) contributions and a government stipend. The fund makes grants for infrastructure and employment projects in impoverished, usually rural areas. The success of the 2626 program led the UN to set up a World Solidarity Fund based on the Tunisian model.

Concern over structural unemployment led to the creation of the Solidarity Bank in 1997. Designed to promote entrepreneurship, the bank makes loans of up to 33,000 dirhams (with a specified grace period and subsidized interest rates) to those with a university diploma (US$1 = d1.2825). It focuses on unemployed and underemployed university graduates, such as waiters with doctorates who might indulge in social unrest. The bank was funded by over 232,000 shareholders who paid in d18.5 million. The state added d11.5 million to bring bank capitalization to d30 million. From March 1998 to May 2001, the bank funded some 42,000 projects that generated almost 60,000 jobs. Thus, the Bank serves the twin purposes of reducing the costs of the EU economic rationalization campaign and lessening its potential to cause political instability.

Tunisia has also focused on supporting entrepreneurship among the "working poor." Following the model of the Grameen Bank in Bangladesh, in October 1999 the Solidarity Bank introduced a micro-credit program to assist entrepreneurs in rural development areas. The program makes loans of d1,000 at 5 percent interest with a repayment period of three years. By 2001, almost 9,000 such loans had been made. Only four loans had fully defaulted.

To further encourage entrepreneurship, Ben Ali recently announced a program to grant leaves of absence to civil service employees and managers who wish to start their own business in the country's less-developed regions. During these one year (renewable) leaves, the government will pay half their salaries. The hope, of course, is that this "safety net" will encourage entrepreneurs to go out on their own.

A Long March Toward Democracy?

The conventional wisdom is that Tunisians have been offered a Faustian bargain, whereby they thrive economically but abandon politics to the political class. This simplistic trade-off is unfair to the vast majority of Tunisians, who have not chosen lucre over liberty. Rather, the photos of fundamentalist carnage in next door Algeria have sensitized them to the threat of violent anarchy and the need to guard against it. They may not embrace the restrictions, but they accept them.

Tunisia is first and foremost a homogeneous society with little ethnic division (contrasted to the Berbers in Algeria and Morocco). It has a long tradition of relatively centralized, personal authority--be it by the Bey of Tunis or the French Resident-General. Further, it is a society with a high premium on stability and consensus, as its relatively bloodless independence reflects. And so it is that the ruling party, the Rassemblement Constitutionelle Démocratique (RCD), possesses the vast portion of the nation's political energy. It has 2 million members and 7,800 branches nationwide and won 91.59 percent of the vote in the October 1999 elections. One-party state or not, the RCD would likely win a fully fair and free election if held today. The seven legal opposition parties are anemic at best. If democracy is to take hold, it may be that the ruling authorities will have to force-feed the opposition.

Ben Ali has in fact done just that (confident that, for the foreseeable future at least, the opposition lacks both bark and bite). In July 2001, he announced an initiative to enlarge the pool of those eligible to run against him in the next presidential elections. And while the opposition holds 34 of the 182 seats in the Chamber of Deputies, these are all seats given to the opposition on a proportional basis, and it holds those seats only because Ben Ali passed a law that ensured the opposition parties at least 20 percent of the seats, no matter how few votes they actually received. The same is true for municipal councils. In Ben Ali's view, these actions "consecrate political pluralism."

These developments reflect Ben Ali's view that "the development of democracy is very much a matter of education and of progressing step by step." He fears that in societies without historical democratic roots, opening the floodgates of political discourse can easily lead to extremism and instability. While he encourages opposition, it is responsible or "loyal" opposition. The "hard" Left and Islamic perspectives are banned outright. Ben Ali views the legal opposition as part of the national consensus and meets with their leaders regularly to promote national unity. Nevertheless, the political space the legal opposition covets is securely held by the RCD.

The recent round of constitutional reforms adds considerably to the country's formal democratic structure. It creates a second parliamentary chamber, gives new prerogatives to the elected Constitutional Council and installs a two-round presidential electoral process in cases where no candidate wins an absolute majority in the first round (as in the French system). It also requires periodic oral questioning of elected officials (as in the British parliament). In Tunisia, where the government has an overwhelming parliamentary majority, this becomes one of the few ways available to foster government accountability.

But these significant structural reforms have been overshadowed by the controversy surrounding the constitution's revised term limit provisions. Ben Ali would have bumped up against the three-term limit when his term ran out in 2004, but the very thought of succession-planning was a non-starter for the ruling party. (Indeed, many Tunisians may well have been frightened by the thought.) Thus, it came as no surprise when Ben Ali proposed a constitutional amendment abolishing such term limits. After further changes by parliament, the proposal raised the maximum age of presidential candidates to 75, thus allowing Ben Ali, at 74, to run for a fifth term in 2009. (In the resulting constitutional referendum, 99.52 percent of the electorate ratified the changes.) Ben Ali's popularity notwithstanding, the symbolism of the term limit waiver is undeniable. Thus, for Tunisian political institutions, the challenge of succession has been postponed but not resolved.

Political scientists have begun to realize that elections alone are not a sufficient definition of democracy. Democracy assumes a competitive electoral arena with multiple strong political parties. Opposition parties cannot be created ex nihilo; instead they must reflect the variety of political, geographical and class interests of the population. Tunisian elections do not yet include, in Joseph Schumpeter's words, "a competitive struggle for the people's vote." While Tunisia possesses the grammar of pluralist democracy, its oversized ruling party crowds out not only political competition but other elements of civil society. The problem of how the party relates to the state and the state to the party is one of the most significant challenges facing Tunisia. It has been avoided rather than addressed.