Will economic liberalism hurt Ennahdha?

With the elections finalized and  the constituent assembly set to begin work on November 22, Tunisia is finally moving on from a country in transition to a country moving forward. Ennahdha’s economic compromises has opened up the party to charges that they have abandoned their campaign promises and the middle class who elected them.

The big winner in the elections was the moderate Islamist party Ennahdha, which received 90 of 217 seats in the assembly. As their victory became clear, they immediately began a campaign a to assure key constituencies that their policies would ensure the economic stability of the country.

Ennahdha’s biggest struggle has and will likely continue to be its struggle to square the circle of their campaign promises for social justice with their neo-liberal economic policies. Ennahdha campaigned on the promise of jobs, dignity, and cleansing the state of its endemic corruption. Since the elections, they have spent most of their time trying to convince the business class and foreign investors that their policies will be beneficial to them. Many in this left-leaning, socially progressive country see this as an affront to the masses that helped elect Ennahdha. Since October 23, Ennahdha leaders have reached out to foreign leaders (investors) in Qatar, visited the Tunisian stock exchange, met with business leaders, and promised to move forward the Tunisian dinar’s convertibility. While this has delighted foreign and domestic markets, it has left many disenchanted.

The issue of currency convertibility could prove to be particularly divisive. While economists have long called for Tunisia to open its currency market (the dinar is tightly controlled and non-exchangable with other currencies). However, the likely short-term effect would be an immediate fall in the dinar.

This would greatly benefit foreign investors looking to buy assets in a newly liberalized Tunisian economy, but would be disastrous for Tunisian middle class savers, who have already been squeezed by Ben Ali’s crony capitalism over the last 20 years. Prices on everything from televisions to tuition abroad would rise for those paid in dinars – that is – the middle class. Much of Ennahdha’s popular support came from these same voters, who cast their ballots for the party they thought would best root out corruption in the system. It is these same voters who will feel abandoned if their savings decrease while the country transforms into a playground for rich foreign investors.

While countries like Qatar and the UAE would certainly benefit from a more open investment climate in Tunisia, it is the position of Europe that is the most important. Tunisia send over 70 percent of its exports to Europe and receives more foreign investment from Europe than from all other regions of the world. Over 1,250 French companies alone operate in Tunisia. Despite these links, Rached Ghannouchi’s first post-election pronouncement was that Tunisian’s should concentrate on Arabic, rather than French. Relations between Ennahdha and France, in particular, appear strained. Most importantly, however, is that given the European debt crisis, it does not appear to be in a position to support the Tunisian economy, despite promises from the G8.

The surprise showing by Aridha, led by a former Ennahdha leader who splintered from the group and ran a highly populist campaign, shows that Ennahdha already has a weakness against populist parties. Aridha beat Ennahdha in the birthplace of the Tunisian revolution, Sidi Bouzid, and performed quite well throughout less developed parts of the country. While it benefited from the largesse of its leader and his satellite TV station, which many accused of breaking campaign advertizing rules, its highly populist message of social justice, handouts, and a return to Islam resonated with enough voters to allow it to receive 26 seats in the Constituent Assembly, third best among all parties. While Aridha appears to be falling apart as a coalition, its success shows that Ennahdha is not the only party that can earn the votes of Tunisians.

Ennahdha will have limited time to help turn the country around. It will be pressured from left and right, from the most secular to the most religious. Its supporters have high expectations and want results quickly. Perhaps it is not surprising that according to recent reports, while Ennahdha will fill 11 of 15 ministries with its own people, they are not aiming to take any of the economic positions in the next government.

 

One thought on “Will economic liberalism hurt Ennahdha?

  1. Pingback: Tunisia’s compact with labor is broken « A 21st Century Social Contract

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