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The World Bank/IMF’s Strange Fruit: Uprising in Tunisia: Part One

August 7, 2011

How Structural Adjustment in Tunisia Contributed To The Political Explosions There…

1.

The Unrepentant Bretton Woods Institutions…

`Bread protester' - Tunis, January 2011

Although to date neither the World Bank (WB) nor the International Monetary Fund (IMF) have gotten much criticism for their policies in the Magreb, the structural adjustment programs that these Bretton Woods institutions essentially forced on  Tunisia over the past three decades have been contributing factors in the economic and social crises culminating in the Arab Revolt of 2010-2011.

Nor has either institution engaged in any meaningful self criticism of how their policies in these countries exacerbated the overall crises. As if the explosions which have rocked the Middle East didn’t happen, the advice which the IMF is offering the afflicted countries can be summed up in one expression: stay the course!, essentially suggesting that Tunisia and other Middle Eastern countries continue with precisely the neo-liberal economic policies that contributed to the recent crisis in the first place.

An ostrich approach remains the order of the day, although the political explosions throughout the region were, at the very least, aggravated by structural adjustment policies. While these policies were in principle supposed to ease the growing socio-economic crises, instead they resulted in deepening the already existing.

An ostrich approach remains the order of the day…As if the explosions which have rocked the Middle East didn’t happen, the advice which the IMF is offering the afflicted countries can be summed up in one expression: stay the course!, essentially suggesting that Tunisia (and other Middle Eastern countries) continue with precisely the economic policies that contributed to the recent crisis in the first place.

The formula of WB/IMF reforms is today well known, almost legendary: it includes reducing government’s leading role in determining economic activities, cutting government spending in general, cutting subsidies on food, medical care and education, privatization of state run industries, reducing import tariffs meant to protect domestic industry from aggressive foreign competition and later on opening up capital markets. All this is supposed to `free the market’ from undo constraints, heighten economic efficiency, stimulate growth and broaden overall prosperity. These policies produced a strange mix – growth (at least in gnp terms) but no development, greater national wealth but less evenly divided.

That such policies failed to stimulate development virtually everywhere they were applied in poor countries is not breaking news these days. The list of IMF failures is long and sordid from its debilitating failure in Bolivia in the late 1980s, to the gutting of the farming dairy industry in Jamaica in the Caribbean, to the decades of supporting tyrants like Mobutu of Zaire (today the Congo) and Marcos of the Philippines.

To the contrary, these policies drove many a poor country yet deeper into poverty and economic deprivation and continue to do so. Still, the degree to which they, over the long term, contributed to massive social and political explosions has hardly been explored, but for starters, it should be noted that in virtually all the countries in which the current `Arab Spring’ revolts have taken place, structural adjustment polices were the order of the day. This is the case in Libya, Syria and Yemen, as much as in Egypt and Tunisia. With the open blessings of the IMF, structural adjustment is also alive and well in Iran as well where the Revolutionary Guard are  taking advantage of privatization policies to gain control of growing sectors of the Iranian economy. In all these cases, structural adjustment has led to greater inequality gaps, a much harder life for the majority of the population, the creation of a narrow super rich elite which aggravates social tensions to the point where they exploded  or nearly did.

It is instructive that in virtually all the countries facing political challenges in the Middle East, in order to temper the anger of the masses, what might be called `anti-structural adjustment policies’ were offered as palliatives. As people took to the streets in Tunisia, Algeria, Egypt, Jordan, Yemen, Saudi Arabia, Bahrein and Syria a slew of programs running directly contrary to the structural adjustment programs were put forth by the political elites of those countries. Jobs’ programs galore, wage increases for public sector employees, the lifting of subsidies on food and fuel combined with the promises of more economic concessions to come has been the order of the day in feeble and desperate attempts to  retain power. Such last minute attempts to retain power failed to save Ben Ali and Mubarak, but in Saudi Arabia, Algeria and Jordan the willingness to step back from structural adjustment has, for the moment, helped the regimes  involved maintain their grip on power.

2.

The Tunisia Example: IMF and WB stats `a bit off the mark’: the operation was a success; the patient died…

A long these lines, the cases of Tunisia and Algeria, the impact of structural adjustment is much more extensive and in ways more insidious than is generally admitted. Both cases are instructive although how the political crises played out differed some.

Tunisia, along with a few other countries like Ghana, has, until the recent social explosion which rocked the country, long been misrepresented as a structural adjustment success story. In need of some countries, any countries, to counter the growing criticism that structural adjustment has been something approaching a disaster for most poor countries forced to accept its conditions, these `models of hope’ were important elements in the World Bank/IMF public relations campaign that structural adjustment, though painful, actually works.

Leaving the Ghanaian example aside for the moment (that `success story’ too is filled with holes, most of them obvious), for decades, Tunisia was nothing short of an IMF poster child: follow the formula and success sooner or later will come your way. Accompanying this was a barrage of statistics celebrating  the country’s economic growth rates, low unemployment, high levels of education and improving social structure.

Tunisia might not have democracy, its supporters in Washington argued, but it was a glowing example of development and constantly put forth as one of Africa and/or the Middle East’s economic success stories. Worse, the rosy economic picture was often used – as it was by the U.S. State Department – to justify, or at the very least tolerate, the country’s politically repressive policies, both in Bourguiba years and increasingly after Zine Ben Ali assumed power by coup d’etat in 1986.

The supposed economic miracle only reinforced U.S. and French justification for defending Ben Ali’s repressive policies as vital to the war on terrorism. It was argued that he was a foil in the struggle against radical Islam, whose influence has always been greatly exaggerated in the Tunisian case.  Take away Ben Ali, the logic went, and Osama Bin Laden or his North African spiritual twin would soon take power in Tunis.

Although a number of respected Tunisian economists insist that the economic picture in Tunisia was accurately reflected in statistics during the Ben Ali era, given the speed of the Ben Ali’s collapse, there is something wrong with the picture they paint. Certainly it was not only the French and U.S. governments that were broadsided, caught unawares by Ben Ali’s collapse, but also the IMF and World Bank. Both institutions were giving rosy analyses up to the end. Must have been embarrassing to see their poster child sink with the speed of the Titanic.

Is it a case in which, as the saying goes, the operation was a success but the patient dies?

The economic restructuring and massive privatization of the Tunisian economy did take place – the country’s economy today hardly resembles what it was in 1987 when Bourguiba was replaced. From the point of view of creating an economy in which the state’s role has greatly receded and the private sector has replaced the state, one could say that technically, the transition has been successful, but that politically and morally, it failed.

But it is only now that the price of that transition, the tension and social contradictions that the transition triggered can be fully appreciated. It has been a model based upon the erosion of state social support, an economy based upon maintaining low wages, high unemployment, rampant corruption at the top and pervasive repression, so much so  that the system simply snapped. When it was all over for Ben Ali and Co. Tunisia had a lopsided economy – overbuilding in its urban corridor, especially in the Tunis region, combined with the deteriorating and mostly ignored interior of the country. Some more rich people for sure, but an extended wave of poverty that has greatly weakened the country’s middle and working classes., growth and GNP statistics placing a veil over growing social polarization between rich and poor.

My first impression was that much of the statistical data presented by the IMF concerning Tunisia over the years was essentially fudged or fabricated by the Tunisian authorities in order to achieve loans and that the poor IMF oversight. How else explain the striking gap between the glowing IMF reports on the one hand and the deteriorating socio-economic reality in Tunisia before Ben Ali’s collapse?

Needless to say, in some ways, IMF-WB analysis was way off and that in fundamental ways, the true economic situation in the country was worse than suggested.

  • Some of the data does not stand up to scrutiny, especially the unemployment rates, low wage rates, etc.
  • The increased standard of living, as gnp figures often do, hid deep divisions within Tunisia of a country where the rich, especially those close to related to the two ruling families, were growing obscenely rich, while the rest of the country, including its working class, middle strata and large elements of its entrepreneurial class were growing increasingly impoverished.
  • An unemployed sector of society, relatively permanent, especially in the country’s southern and western interior regions, was growing. Even those with jobs were forced into low wage occupations. This has been particularly true in the much touted Tunisian tourism industry.

The increased standard of living, as gnp figures often do, hid deep divisions within Tunisia of a country where the rich, especially those close to related to the two ruling families, were growing obscenely rich, while the rest of the country, including its working class, middle strata and large elements of its entrepreneurial class were growing increasingly impoverished.

The great gap between rural poverty in the south and west of the country and the somewhat more prosperous coastal areas was acknowledged but never a great cause of concern. When it was referred to, it was often within the contrived framework of an exaggerated `Islamic fundamentalist’ threat while the more salient causes of social and political unrest were abject poverty, lack of employment opportunities for the country’s youth, decaying – and in many places almost non-existent infrastructure and social programs, ie – classic economic and social pre-cursors to revolt.

The myth of the great fundamentalist danger and possible take-over, was essentially blown out of the water by reality itself. When the people of Tunisia rebelled last year, religion has very little to do with it. The main causes were classic socio-economic conditions: high unemployment, few job opportunities, high levels of government corruption, 25 years of open repression, etc. It was much more a rebellion of Tunisia’s youth wanting a future, wanting dignity, looking for a path both to democracy and prosperity. Same was true in Egypt and actually throughout the Arab world.

Still for all that, after sifting through data and critiques of six months now, I have come to conclude that the economic data the World Bank and IMF presented on Tunisia, is, in the end not so bad. There is much truth in it, which makes the collapse of the Ben Ali regime all the more curious. And yes, the more one looks at it, it is a case of the operation being a success but the patient dying.

So how to explain the collapse of a state whose growth rates were somewhere between 4-5% and which seemed to have one of the highest standard of livings in Africa? The more I probe this issue, the more it seems that the very success of IMF structural adjustment leads to social conditions that are unsustainable. The more the structural adjustment policies were adhered to, the more likely that the whole ship would sink. The main factors pushing the contradictions to the boiling point are:

A. the whole model has been based upon wage repression – keeping wages as low as possible so that Tunisia could compete with other low wage competitors, seeking a market niche in Europe. The collapse of Communism created a whole new competitive array of nations with low wages and relatively highly educated populations. Good for Europe which has a number of cheap sources of imports to choose from, very difficult for a small country like Tunisia

B. Although there seems to have been very little written about it, at the heart of this model is wage repression. So much has been made of Tunisia’s need to suspend democratic practices in order to fight Islamic fundamentalism. In fact, at the heart of Ben Ali’s repressive apparatus was the need to control the country’s work force and trade union movement to keep labor actions down in order to counter wage pressures. Islamic fundamentalism, it turns out, had very little to do with the repression and thus, when the rebellion against Ben Ali finally surfaced, the world witnessed how small a role – if any – the country’s Islamicist movement played in the course of events.

C. Although Tunisia’s economy did experience growth, in the Ben Ali years, it was mostly concentrated in what we might in the USA describe as `McDonalds’ or `Walmart’ – like jobs. This was due in large measure to the structure of the Tunisian economy which has been shaped as a peripheral economy feeding a European (mostly French and Italian) core.

D. There is another ironic outcome of the modernization of Tunisia’s economic structures. As elsewhere in the world, modernization often increases productivity at the same time it eliminates jobs. A classic example of this tendency in Tunisia is the modernization of the country’s successful phosphate mining industry which has become more efficient over the past few decades.

At the same time the labor force has been reduced from 15,000 to 6,000 miners, devastating the mining towns like Gafsa, Redeyef. If some of the profits from that modernization had been redirected (through taxation) to the Tunisian state for jobs programs , the crisis in the mining district might have been somewhat alleviated.  To use the increased profits in this manner appears to have been the last thing on the minds of both the company (which is state owned) or the Tunisian government.

Although the country has a talented and educated work force, there was no transition to high end or high manufacturing, which would have produced stiff competition to similar European industries. When it came to the kind of investments that might have produced a kind of Mediterranean Taiwan or Singapore in Tunisia, such investments did not materialize.

3. Bourguiba, Ben Ali and the IMF

Another Tunisian bread protestor trying to reason with a Tunisian soldier, early January 2011

One of the more powerful images of the recent uprising against the Ben Ali regime is a photo of what appears to be a rather poor man who is aiming, as if he could fire it like a bazooka, a loaf of bread at Tunisian soldiers then on the streets to maintain order. Other photos, many of them in fact, pick up the bread theme: the demonstrations rocking Tunisia in late December and early January show angry protestors holding up bread as well, the message being that the revolt was as much about an economic crisis in the country as well as a protest against 25 years of, to put it mildly, undemocratic rule.

The bread image is not only about the current economic crisis but reaches back more than a quarter of a century ago.

One of the more powerful images of the recent uprising against the Ben Ali regime is a photo of what appears to be a rather poor man who is aiming, as if he could fire it like a bazooka, a loaf of bread at Tunisian soldiers then on the streets to maintain order.

Prior to the December 2010-January 2011 uprising, the largest mass protest since the advent of Tunisian independence in 1956, took place nationwide in 1984. In January of 1984, `bread riots’ broke out in the country, triggered by IMF/World Bank insistence on Tunisia lifting the subsidies on wheat and semolina. As the price of bread more than doubled over night, something approaching a national uprising followed that left 80 persons dead, hundreds wounded and nearly 1000 protestors jailed. Bourguiba’s regime very nearly fell as a result.

Whatever other criticisms made of Tunisia’s founding president, Habib Bourguiba – in truth he was no great democrat – he looked at World Bank/IMF structural adjustment programs with a great deal of skepticism. This he learned from the bitter experience of the 1984 events. True enough, due to a number of factors, in early 1984 the Tunisian economy was on the skids with most of its indicators suggesting trouble. (see Perkins, 2004, pp. 169-171 for details).

As structural adjustment programs took hold in many Third World countries in the early 1980s, Bourguiba found that Tunisia was under similar pressures as many others to comply with the `Washington Consensus’. A whole package of measures put in place by international banking and finance institutions meant to counter the impact of the global Third World debt crisis which exploded in the early 1980s.

Key to Tunisia receiving its loans at the time was the country ending subsidies on key food items (wheat and semolina in particular). The logic of this is that subsidies on food (or other items) distorts the market relations between supply, demand and price and as such slows growth.

Missing from this analysis is the nature of peripheral economies, which, in order to compete in the global economy must repress wages to keep prices moderated. But this puts considerable pressure on the working class to make ends meet. Food subsidies – cheap food in particular – are a way to compensate for the low wage levels to make life minimally bearable. Ending the food subsidies as happened in Tunisia essentially takes the financial rug out from under those on low salaries, the unemployed, those on fixed income.

Tunisia was not alone in being pressured to lift subsidies on bread; in the Arab

1977 food riots in Egypt; as in Tunisia in 1984, subsidies on basic foodstuffs were ended, triggering a wave of social unrest

world alone similar protests took place in Egypt (1977), Morocco (1981) and later in Jordan (1989). More broadly speaking more than 40 countries world wide suffered similar fates as country after country was forced, in exchange for badly needed IMF loans, to cut food subsidies.

Faced with the most serious threat to his regime’s stability, in response to the national uprising, Bourguiba re-instituted the bread subsidies. The price of bread would drop immediately from 18 cents to 8 cents a loaf. Previous increases in the price of pasta and flour were reduced as well.

Using a theme which would be picked up by Tunisian demonstrators 27 years later in January of 2011, in 1984, waving baguettes (loaves of bread), tens if not hundreds of thousands took to the streets of Tunis to voice their approval. ,

But Bourguiba was shaken and the legitimacy of his rule called into question. If he reversed suspending bread subsidies, he also decided to tighten the country’s security measures to prop up the weakening of his grip on power. To deal with the security issues the protests had created and in an move that would ultimately lead to Bourguiba’s own down fall, he called  Zine Ben Ali, then `in exile’ as Tunisian ambassador to Poland, back to Tunisia and made him Minister of the Interior. Ben Ali, trained at police academies in both France and the United States, was known as a hard-liner on security issues as he would well prove himself to be.

For the next two years that Bourguiba remained in power, Tunisia’s relations with the World Bank and the IMF remained strained, the Tunisian president hostile and suspicious of the Washington based lending organizations. Then in 1986, Bourguiba was overthrown (a word rarely used, but in retrospect, quite apt) by none other than recently recalled interior minister, Zine Ben Ali.

That the World Bank or the IMF had anything to do with Bourguiba’s fall is probably beyond the possibility of proving but all indications are, that when the news of the demise of Tunisia’s first president reached them, no tears were shed in these Washington based institutions. Almost immediately after seizing the reins of power from Bourguiba in 1986 – within weeks – curiously enough, Ben Ali opened up negotiations with the two institutions and very soon, Tunisia was once again receiving loans, with the usual structural adjustment stipulations attached. Interesting convergence of interests to say the least.

Almost immediately after seizing the reins of power from Bourguiba in 1986 – within weeks – curiously enough, Ben Ali opened up negotiations with the two institutions and very soon, Tunisia was once again receiving loans, with the usual structural adjustment stipulations attached.

Long before Bourguiba fell from power, the IMF and World Bank had their own plans for the country…what was missing was the political will on the Tunisian side, which Ben Ali would quickly provide immediately after seizing power. As Kenneth Perkins accurately points out `…the structural adjustment policies envisioned by the international agencies entailed policy revisions reaching to the very roots of the [Tunisian] economy.’ These policy changes went far beyond lifting subsidies on bread and included a radical policy of trade liberalization, the devaluation of the Tunisian dinar to make exports cheaper, extensive privatization and deregulation of what had been up until the a state run economy. (1)

4.

The Deadly Cocktail: Wage Repression and Ending Food Subsidies

While it doesn’t explain all the reasons for the Ben Ali’s repressive rule, implementing IMF reforms and maintaining depressed wage levels could have easily provoked another social storm similar to the bread riots in 1984. The lessons that Ben Ali learned from the 1984 crisis – or didn’t learn – are interesting. During his years in power wages were kept artificially low; the structural adjustment criteria, bound to trigger social crises were implemented and done so with almost religious zeal.

An example: to attract European tourists, Tunisia would advertise that a Mediterranean vacation along its shores at Sidi Bou Said, Sousse or Djerba was the cheapest in the region, cheaper than even a Turkish vacation. This was probably true. How is it though that Tunisia was able to keep its tourist rates so modest if not through keeping wages in the industry at rock bottom `Walmart-like’ levels?

How to keep society from exploding once again? Simple: increase to an alarming degree the repressive apparatus of the state, co-opt the country’s labor movement, control the media – all of course with the excuse of countering a mostly non-existent radical Islamic fundamentalist threat. In a country of 11 million, the state security apparatus is said to have numbered 250,000. It wasn’t Tunisia’s Osama Bin Laden’s that Ben Ali was particularly concerned about so much as it was demands coming from throughout Tunisian society for higher wages and improved working condition. It was such policies that the IMF supported in Tunisia and upon which loans were made conditional.

Nor should it be any surprise, none at all, that with the collapse of the Ben Ali – Trabelsi mafia (that is the correct term), a wave of strikes and labor actions for higher wages broke out simultaneously with the political demands for change in early 2011. The pressure of low wages had built up over more than a quarter of a century. The strike wave continues to this day.

5.

Privatization and Ben Ali-Trabelsi Greed or..Control Fraud, Tunisian Style

Privatization, one of the main foundations of structural adjustment, as mentioned above, is based upon the assumption that the private sector will be a more efficient economic player than the state. While it might be true that there are times when privatization of public assets does lead to greater efficiencies, there is nothing, and certainly not the evidence from Russia, Eastern Europe and elsewhere that substantiates privatization works as a general rule. Indeed, the impact of privatization policies on Third World countries has given insidious results in many places, among them Tunisia.

In Tunisia, the Ben Ali and Trabelsi clans saw in privatization as something more than a way to give dynamism to the country’s economy. They saw it as a way to become billionaires.

Writing about another case of massive fraud, half a world away – the Savings and Loan scandal in the United States in the late 1980s – William Black uses the expression `control fraud’ to explain the heart of that particular matter:. Citing other academic sources, he opens his classic study of that period, The Best Way To Rob A Bank Is To Own It (University of Texas Press: 2005), with a succinct quote which in many ways helps explain the Ben Ali-Trabelsi looting of Tunisian resources:

“A control fraud is a company run by a criminal who uses it as a weapon and shield to defraud others and makes it difficult to detect and punish the fraud” (2)

Black goes on to explain why control frauds end in `catastrophic failure”  citing three reasons, all of which would apply to the Tunisian privatization scandal:

  1. Control Frauds create a `fraud friendly’ environment by hiring `yes men’ (and women). Combining excessive pay, ego strokes (calling employees geniuses and other such nonsense) and terror against those who resist, control frauds are able to much of the company to buy into the scam
  2. The CEO of a firm engaging in control fraud has managed to control the regulatory environment so that it is not a serious threat to fraud operations.
  3. Control fraud creates an environment where corporate assets can easily be transferred into personal assets.

Replace `CEO’ with `head of state’, or the two family clans in power in Tunisia and the `control fraud’ model applies nicely to Tunisia on all three points.

  • The Ben Ali’s and Trabelsi’s surrounded themselves only with `yes men’. Those who questioned their actions were pushed aside, purged and possibly in a number of cases physically eliminated.
  • The `regulatory environment’  that might have acted as a check on Ben Ali-Trabelsi greed – the regulatory functions of the state were, in the name of structural adjustment, systematically weakened  (with IMF-World Bank support). As the judiciary and state apparatus in all its aspects became more tightly controlled by the two clans, any serious internal investigation of control fraud was not just unlikely: it was impossible.
  • The ease with which the two clans were able to transfer public assets into their own private hands was so massive that it defied descriptions. In an small country like Tunisia with its population of 11 million people, the early post-Ben Ali estimates of the size of the assets controlled by the two families exceeded $15 billion.

Even if the figure of Ben Ali-Trabelsi assets is a bit off as we will probably never know the exact extent of the theft – its dimensions are impressive. Not only were the two clans able to transform the public wealth for their own private use, but now the reports are circulating that they have been able to get much of that wealth out of the country with relative ease, suggesting that at least some of the mechanisms of control fraud used by the former regime remain in place.

Few writers have followed the evolution of the massive corruption of the Ben Ali regime – in which privatization of state funds and property played a prominent role – as closely as

unraveling the Trabelsi clan economic empire in Tunisia

French journalist Nicolaus Beau. He’s written two important books on the subject. The first was Notre Ami Ben Ali with Jean-Pierre Tuquoi in 1999. (It’s in French; it can be downloaded for free by clicking on the title above). More recently (2009), in collaboration with Catherine Graciet, he wrote La Regente de Carthage: Main Basse sur la Tunisia – which details the breathtaking rise to wealth and power of Leila Trabelsi, Ben Ali’s second wife, whose siblings all together form one of the country’s two most powerful clans.

The earler – Notre Ami Ben Ali – was one of the first books to puncture the myth of the Tunisian economic miracle. It details the muzzling of the Tunisian press, the extensive and already pervasive repressive atmosphere which had long enveloped the country, and suggested – this in 1999 more than a decade before the final collapse – that the economy was in bad shape.

Where the economy was concerned, Notre Ami Ben Ali pointed to the growing epidemic of educated youth unemployment, the cutting of government programs for infrastructure, the weakness of the country’s banking sector with its relatively high default rate, and the beginnings of `the great disaster’ – the literal looting of the country’s resources by the two leading family clans.

Notre Ami Ben Ali was one of the first books to puncture the myth of the Tunisian economic miracle. It details the muzzling of the Tunisian press, the extensive and already pervasive repressive atmosphere which had long enveloped the country, and suggested – this in 1999 more than a decade before the final collapse – that the economy was in bad shape.

Where the economy was concerned, Notre Ami Ben Ali pointed to the growing epidemic of educated youth unemployment, the cutting of government programs for infrastructure, the weakness of the country’s banking sector with its relatively high default rate, and the beginnings of `the great disaster’ – the literal looting of the country’s resources by the two leading family clans. The book sold well in France creating some waves in the media at least, but resulted in absolutely no change in the French government’s policy which by 2009 had in Tunisia almost 1250 companies employing 110,000 Tunisian workers.

During the 1990s, the main structural adjustment policies implemented in Tunisia had to do with reducing trade barriers in order to strengthen the country’s competitiveness with Eastern European countries emerging from communism that were already shaping up to be stiff competitors for European Union access. In 1995, despite the growing complaints of systematic torture of the regime’s opponents, Tunisia was able to sign a bilateral `free trade zone’ agreement with the European Union.

Entitled the Association Agreement with the European Union, it came into effect in 1998. Conditioned on seriously reducing the country’s protective tariffs, the free trade agreement was created in large measure with the assistance of the World Bank. (3) Its plans included the complete dismantling of trade barriers on industrial goods between the EU and Tunisia by 2008 stripping away the veil of protectionism that had been in place since Tunisia’s independence. Many studies at the time argued that such a move would result in the elimination of a good 1/3 of Tunisia’s textile manufacturers and the loss of tens of thousands of jobs. Undaunted, Ben Ali forged ahead.

Entitled the Association Agreement with the European Union, it, came into effect in 1998.  Conditioned on seriously reducing the country’s protective tariffs, the free trade agreement was created in large measure with the assistance of the World Bank. (3) ) Its plans included the complete dismantling of trade barriers on industrial goods between the EU and Tunisia by 2008 stripping away the veil of protectionism that had been in place since Tunisia’s independence. Many studies at the time argued that such a move would result in the elimination of a good 1/3 of Tunisia’s textile manufacturers and the loss of tens of thousands of jobs. Undaunted by such analyses, Ben Ali forged ahead with the agreement.

La Regente de Carthage fills in the blanks during the decade that transpired between 199 and 2009, ie, ending just before the regime’s collapse. While already in 1999 there was evidence of corruption, of the grab for power that would bring the whole thing spiraling downward, still, ten years later, the evidence of massive fraud and abuse detailed in the book which is only 174 pages in length is startling.

In progress: to be continued/revised in the next few days …

Footnotes:
1. Kenneth Perkins. A History of Modern Tunisia. Cambridge University Press: 2004. p. 173
2. William K. Black. The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicans Looted The S&L Industry. University of Texas Press: 2005. p.1-3.

3. Nicolas Beau et Jean-Pierre Tuquoi. Notre Ami Ben Ali. La Decouverte. Paris: 1999. p.159


											
6 Comments leave one →
  1. August 17, 2011 9:18 am

    Sorry for saying this, but Algeria was not under any structural adjustment program until the mid-1990. Prior to that date, Algeria had a foreign debt of about $25 billion (mostly contracted from Le Club de Paris & London) with moderately high interest rates, but was not undergoing a SAP. Having said that, the political crisis of the 1990s–i.e., the civil war in Algeria–has its roots in the political structure of the Algerian state itself. You cannot factor in as a variable the IMF or the WB in the Algerian crisis. As for Tunisia, you are argument is borderline spurious.

  2. August 17, 2011 9:43 am

    Thanks for your comments…(really)

    1. Concerning Algeria…i really haven’t gotten to that yet but the main point will be that the military used privatization policies to strengthen their position – no dominate – the Algerian economy. you are correct that Algeria didn’t actively pursue structural adjustment until the 1990s which I will review later. The World Bank loan (or was it IMF?) came in 1994 and served at the height of the civil war to make it clear that `the international community’ supported the military’s role in that period. It was no small thing. Still, structural adjustment in Algeria has not been as important as in Tunisia, mostly because of oil. I’ll cover that stuff later.

    2. Concerning Tunisia… I disagree, completely with your comment. The structural adjustment policies – as I argue here – badly aggravated the situation in the country. The privatization program was basically hijacked by Ben Ali and Trabelsi clans that manipulated it in such a way to amass great personal wealth and control of the economy. Structural adjustment was a major factor in the economic and social polarization that led to the current explosion not just in Tunisia but regionwide.

    anyhow… cheers, rjp

  3. Ian permalink
    September 6, 2011 3:29 pm

    I think you meant Mobutu rather than Lumumba

Trackbacks

  1. The World Bank/IMF's Strange Fruit: Civil War in Algeria, Uprising … « Politics And Funds
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  3. Notes – Remarks of Rob Prince. “The Political Economy of the Magreb Spring and its Aftermath” The Magreb Center, Washington DC, April 24, 2012 « Rob Prince's Blog

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