Our Opinion: 2021

Crisis in Tunisia

Tunisia is facing its worst crisis in a decade of democracy after President Saied ousted the government and suspended parliament with help from the army, a move denounced by the country’s main political parties.

Tunisia has one of the highest COVID-19 death rates in the region. Could there be a crisis brewing in emerging markets?

Saied’s action followed months of disputes pitting him against Prime Minister, Hichem Mechichi, and a fragmented parliament, as Tunisia descended into an economic crisis exacerbated by one of Africa’s worst COVID-19 outbreaks. The crisis has evolved into heated street confrontations as Saied’s critics, including Islamists, warned he was endangering the democratic system introduced after the 2011 Arab Spring uprising. Tunisia’s hard-currency bonds tumbled on the international markets, as Parliament’s Speaker, Rached Ghannouchi, urged Tunisians to take to the streets in opposition. “Kais Saied is dragging the country into catastrophe,” he told Turkish television.

Saied invoked emergency powers under the constitution late on Sunday to dismiss Mechichi and suspend parliament for 30 days. He extended existing COVID-19 restrictions on movement, and vowed any violent opposition will be met with force. He has rejected accusations of a coup. The president urged people not to go into the streets saying “I call on the Tunisian people to stay calm and not respond to provocations.

The White House said it had not yet determined whether Saied’s actions constituted a coup. However, the U.S. State Department warned Tunisia not to “squander its democratic gains.”

Rival groups have gathered outside the parliament building, pelting each other with stones and hurling insults, but the size of the protests was limited to hundreds, and there have been no major reported incidents of violence. The military surrounded the parliament and government palace, stopping members of parliament and state workers from entering the buildings, as well as the national television station.

President Saied also reinforced a long existing rule that bans public gatherings of three or more people in streets or squares. His intervention followed protests in major cities over the government’s handling of the pandemic and economy.

Saied, who has not said when he will appoint a new premier or relinquish emergency powers, has also ordered that state administrations and foreign institutions stop work for two days.

Though it has failed to deliver prosperity or good governance, Tunisia’s democratic experiment since 2011 has stood in stark contrast to the fate of other countries where Arab Spring revolts ended in bloody crackdowns and civil war. Saied has framed his actions as a constitutional and popular response to years of economic and political paralysis, saying Article 80 of the constitution gave him power to dismiss the government, appoint a temporary administration, freeze parliament and lift the immunity of its members.

Meanwhile, at the other end of the continent, South Africa has seen some of the worst rioting and looting since the end of the apartheid era. More than 200 people were killed, many towns started to run out of food as supplies were disrupted, and troops had to be deployed on the streets across the country to restore order. Turkey is looking more unstable by the day. In Cuba, there have been widespread protests against the government as the country’s economy has been battered by one of the worst outbreaks of Covid-19 in the Americas. Worries have been starting to stack up in other countries too. Markets are getting jittery. The South African rand slumped. Cuba’s economy is under severe pressure. The effects are rippling out across the wider emerging markets, with all the main indexes and currencies sold off.

It may just be a coincidence. Perhaps the protests will blow over without any wider consequences. Yet there are also reasons to fear that this could mark the beginning of a wider period of Covid-related political turmoil in the developing world. First, slow vaccination means the pandemic is hitting far harder, and lasting far longer, than it has done in the major economies. Europe and North America have hit 60%-plus vaccination levels, enough to dramatically reduce hospitalisation and death rates even as new variants emerge. South Africa has only managed to vaccinate 5% of its people so far, and rates in the rest of Africa are even lower. The result? While much of America and Europe is opening up again, many developing countries have no choice but to impose fresh restrictions. The Covid emergency is stretching to two and perhaps three years, putting pressure on society.

Next, economies can’t be bailed out. Europe, the US and Japan all have credible central banks and secure currencies and can print money on a vast scale to get economies back on their feet. Furlough schemes protect jobs, tax breaks and soft loans keep companies afloat, and huge spending programmes keep demand buoyant. The pandemic has done remarkably little damage to developed economies.

It is a different story in the emerging markets. None can print money and governments can’t step in with unlimited support. In many places, the pandemic means food and medicines are in short supply, unemployment has soared, and businesses have had to close down. Inevitably, that puts far greater pressure on political systems than in the developed world. People are angry and widespread corruption, as in both South Africa and Cuba, hardly makes it any better. It is not surprising that protests and riots are starting to emerge – people have plenty to be angry about.

Finally, in many cases we are starting to see state failure. Dealing with a pandemic requires an effective government. Even France and Germany, with some of the most efficient state machines in the world, have struggled to come up with an effective response. In much of the developing world, the government is riddled with corruption, appointments are dished out to cronies, and there are hardly any civil servants with the expertise to respond to an emergency. It is failing governments that are most at risk of revolutions – and a crisis such as this exposes every weakness in the system.

In the developed world, vast borrowing has allowed economies to sail through the pandemic without any real damage. But there will be a price to be paid somewhere and it looks like it may well come in the form of a series of Covid revolutions across the developing world. Markets are worrying about inflation, debt and how quickly growth will get back to normal. But political unrest followed by financial collapses in the emerging markets could be the real threat.

27th July 2021