Tunisia’s Donor Assistance Glossed Over Sectors Related to Economy

Remember the underlying causes of Tunisia’s revolution for dignity?  Remember how the police-security sector represented the discontent and mistreatment than many Tunisians faced? Well, take a look at how many donor assistance projects glossed over these sectors.   As shared on Huffington Post earlier, PITAPOLICY believes that Police Reform, Informal Economy, and Corruption represented the root causes–which pretty much did not receive as much donor assistance attention as the more glamorous issue areas of new media/blogging.  #Smuggling

Note: An earlier version was shared on January 17th.  Due to unforeseen circumstances, the first outlet that reviewed and edited this, lost the latest version in its queue–a downside of blogger reality… which means that bigger news outlets covered aspects of this topic even though PITAPOLICY reviewed this issue and submitted the piece in early January.  Although it is a shame that some media outlets “get behind the eight-ball” in their editing queue, thank GOD Huffington Post allows PITAPOLICY to share content when other media outlets fail to deliver.  In other good news is that on April 13th, at the annual Muslim World Global Donors’ Forum, PITAPOLICY’s Mehrunisa Qayyum will be participating on a panel looking at donor assistance. 

Another version available on Huff Po.

A speech given by a Tunisian Lorax on donor assistance is very much needed.  On February 18th, U.S. Secretary of State, John Kerry, made a “surprise visit’ to Tunisia.  However, a conversation that goes beyond a congratulations on the new constitution, and an intake on the security situation, would have been more surprising.  In fact, a conversation on how Tunisia’s donor assistance largely glossed over sectors related to the economy may explain why protests continued in January — even after the Ennahda ruling party agreed to step down.  Below is a conversation that we would have hoped Secretary Kerry had with Tunisia’s President Moncef Marzouki.  This speaks more to the recipient’s interests than the various donors’ interests…

Background

Following the 2011 uprising, Tunisia has received $849.5 million in aid from 25 different donors, according to the  report “Inside the Transition Bubble–International Expert Assistance in Tunisia” released by the Institute for Integrated Transitions (IFIT).  The report categorized  financial and technical assistance into four areas of: media reform; security sector reform, judicial reform, and youth employment.
Donor Savior Complex?
Despite Tunisia’s center-stage role in attracting large amounts of donor assistance, the root causes which prompted Tunisia’s revolution, like high unemployment, remain unaddressed while the informal economy and illicit trade have expanded.  As a result, “the smuggling of illicit goods now accounts for 40 percent of the Tunisian economy and 30 percent of its jobs” and reflects how little impact international donor assistance has had on the two sectors that received the bulk of aid.

Over the past three years, the transitional government has made little progress on reining in high public spending, one of the key requirements of international financial institutions in receiving further monetary assistance. After calling for reducing subsidies and increasing taxes, the transitional government has suspended energy price increases and taxes, losing tax revenue from its growing illicit trade.  According to last month’s World Bank  report, Tunisia’s informal economy has grown to an estimated $1 billion.  Consequently, combined with cross border smuggling, the Tunisian government has lost out on an opportunity to extract revenue through value-added taxes on goods coming in from neighboring Libya and Algeria.
In trying to make up for its fiscal woes, the government proposed to levy taxes in an effort to raise $220 million in revenue--a fraction needed to support the $2.59 billion in food and energy subsidy commitments within the proposed 2014 budget.   Add to that Tunisia’s latest economic challenges.  First, renewed protests resurged on January 7th among farmers, January 9th with a public outcry over taxes in Ettaddamon on the 11th); and second, The fact that multilateral agencies like the African Development Bank cancelled their $300 million line of credit, and one may wonder what was the purpose of the record number of international NGOs providing assistance to Tunisia.  Was it just another case of the Donor Savior Complex fulfilling a need to feel relevant by doling out advice and funds towards secondary challenges?
Although Tunisia represents a version of political success marked by its transitional political period –or to borrow from Ibrahim Sharqieh’s description “sound management of transition process”— how does one get the upside of political development to spillover into its economic development using donor assistance?

  • Targeted donor assistance.  In order for financial and technical donor assistance to be effective, it must be targeted to sectors that the host country deems a priority. However, if assistance is provided in areas that do not address the sectors of Tunisian economy that require help, then perhaps that effort was futile.  For example, why not offer vendor license training along with micro-loans.  At least those who do not received the loans for their small shop have the ability to start small with a cart.  Another example: organize and engage farmers who struggle with transportation costs, which is why they protest rising energy prices. Donor donor assistance to Arab transition countries is one solution, but other tools may be used to drive more positive impact to the root causes that brought protesters to the streets…

 

  • Sectoral assistance. After the uprisings and with security deteriorating across the region, the tourism sector was hit hard effecting current account balances. One way for Arab transitional governments to contain political spillover to  boost economic growth is by reforming the tourism sector. Sharqieh argues that staying the course of successful political transition will signal ‘normalcy’, and thereby reignite its tourist industry and boost the economy.  Even prior to the 2011 uprising in Tunisia, the sector was disjointed from the growing economic grievances.

Although, the recommendations put forward by the Institute for Integrated Transitions for targeting donor assistance to improve economic productivity are useful, there was overemphasis on the Security Sector & Rule of Law (SSR) sector as opposed to the employment sector–ironically, the very criticism that emerged within the report targeting international experts.  In contrast to Libya and Yemen, both heavily-dependent on US security assistance, Tunisia’s transition resulted in militarization of  groups.  Consequently, a weapons smuggler sympathizing with Salafi extremists, assassinated Mohammed Brahmi and Chokri Belaid –which goes back to the growing smuggling business described earlier.

Nonetheless, given that Tunisia’s revolution represents the least violent transitions among transitional Arab countries, we can see how many would anticipate assistance as a positive “boost”.  However, there is a  body of evidence argues that donor assistance often triggers violence: “higher risk of civil war in those countries that have much wealth, but where a large share of the population is potentially excluded from accessing it,” says the Journal of Peace Research.  Tunisia is not at the brink of civil war, but Tunisia did revolt against a system where ‘a large share of the population is potentially excluded from accessing it’.  Technical and financial assistance considers ‘north-south’ dynamics, right?

Meanwhile, the renewed protests signify how the original issues remain sidelined as donor assistance deals with the parallel world that does not intersect with the underlying causes.  Training police forces does not address their fundamental , problematic role in a security state, which requires police reforms.  Why not imagine a different for international NGOs to provide support–especially since funding sectors unrelated to employment are not equally impactful on transitional societies.     Four observations highlight how donor assistance missed out on facilitating more impact by glossing over key drivers of Tunisia’s revolution:

  1. Absorptive Capacity: The absorption capacity in spurts mirrors the challenges witnessed in moments of state emergency.  As noted in the report, unfortunately, conferences served as the easy way to spend funds while allowing the opportunity to claim accomplishments, e.g., training, publicity, and overall “territory marking”.
  2. Assistance Avoided Economic Related Challenges: Given the large amounts of assistance, it was frustrating to see that ‘generating employment’ did not focus on how to mainstream informal economy.  There was no mention of international experts nor NGOs that could claim ownership of the leading problem: growing employment within the formal economy.  Since the challenge of ‘generating employment’ appeared daunting, none of the donor assistance programs felt that they could even approach labor activists or associations that have vested interests in addressing economic solutions.  Instead international experts went for low-hanging fruit first.  For example 20 NGOs targeted assistance towards media and human rights by meeting with unions and five media conglomerates–whereas 18 NGOs targeting assistance towards primary challenges, like employment, interacted with only three actors in the private sector and no unions.
  3. Donor Savior Complex Emerges in Media Sector Reform:  Not surprised that media training hyper-focused on “blogger” expansion when investigative reporting is more crucial in both addressing the political transition process as well as providing a more structured outlet for gainful employment.  Who pays bloggers?  In a field that is largely self-taught (and clearly advanced in Tunisia), providing loads of training in this field is not an effective allocation of resources if it does not generate employment.
  4. Hyper-Focus on Security: The IFIT report highlighted the limited supply of SSR experts for police reform, which also mirrors the problems of monopsony in that only five institutions(UNESCO,the ICRC, FRANCOPOL,OHCHR, and DCAF) could deliver modern SSR and police training programs suited to Tunisia” and that Interior Ministry “ministry officials criticized the predilection for pre-packaged models of assistance based  more on suppositions than actual needs,” reported IIT. There is a need to cleaving police law and order from larger security-military culture reform.  Rather than reinforcing boiler-plate model at the state level, SSR issues need to incorporate the province level experience.    For example, elevate local NGOs to the debate and engagement level. Civil society groups that focus on police brutality should be recognized for what they are: neighborhood watch groups.  At the same time, dealing with police brutality through civilian dialogues moves away from hyper-security state.  Dr. Jebnoun elaborates on the types of security reform needed and how to implement vis a vis the new constitution.

Unlike Yemen and Libya, foreign donor assistance targeted low-impact issues, like social media training, rather than addressing economic reform and development areas that have triggered protests in Tunisia again.  Meanwhile, the upswing of Tunisian’s smuggling magnify the economic –not security–concerns that preceded its revolution.  Had donor assistance ventured into the youth employment sector, as deeply as the security sector, to identify growth sectors, the informal economy “opportunities” (smuggling) may have been averted.  Moreover, it would also bolster other Maghreb countries’ intra-regional trade opportunities.  Tunisia is not only the first of the transition economies in the Arab world, but proves crucial in leveraging its own economy to bolster intra-regional trade, a key challenge shared by Libya, Algeria, and Morocco.


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