The Grave of the Jasmine: How Tunisia, a Beacon of Democracy, Became a Failed State

Written on May 19, 2021

Earlier this week, Tunisia, hailed by the West as a model of democracy in the Islamic world, requested aid from the International Monetary Fund for the fourth time in the decade since the Arab Spring. Since 2011, Tunisia's consumer price index has increased by more than half, while the unemployment rate has remained high at 15%. The youth unemployment rate reached a huge 37% in 2019. Tunisia's gross national product has been declining since 2014, and its national output in 2019 was only the same as in 2007. Under the impact of the epidemic, Tunisia's economy shrank by more than 8% in 2020, and this year its economy is predicted to rebound by only 3.8%. Not surprisingly, more than 13,000 Tunisian refugees arrived in Italy alone in 2020.

As the only country to have established a stable constitutional democracy after the Arab Spring, and as a beacon of democracy in the Islamic world in the eyes of the West, why is Tunisia in such a situation? To understand Tunisia's economic crisis, we can start from the micro perspective of the phosphate rock industry.

Phosphorus is an essential element for life, and phosphate rock is therefore an important material in maintaining the world's food supply. In 2010, Tunisia, with a population of only 10 million, ranked sixth in the world in terms of phosphate rock production capacity, accounting for 5% of the world's output, and 8% of the world's exports of processed phosphorus products, making it the world's fifth largest exporter. . The export value of phosphate rock and processed phosphorus reaches one billion US dollars, accounting for 6% of its total exports. It is an important way for Tunisia, which has long been suffering from trade deficit, to earn foreign exchange. Phosphate rock is one of the few industries in Tunisia that ranks among the top in the world as a small developing country. It not only provides employment and foreign exchange, but is also the national pride of Tunisia.

However, Tunisia’s phosphate industry has plummeted since the Arab Spring. In 2011, the output of processed phosphorus dropped from 2 million tons in 2010 to 800,000 tons, while the output of phosphate rock dropped from 8 million tons to 2.5 million tons. Even after the short-term social upheaval that followed the revolution, Tunisia's phosphate industry has yet to recover. Although phosphate rock production initially recovered and reached a post-revolution high in 2017, it was still only over 4 million tons, barely more than half of what it was before the revolution. Since then, it has been even worse, with output by 2020 only around 3 million tons.

The most direct cause of the collapse of Tunisia's phosphate industry is widespread strikes. Ironically, the strikers were not workers working in the phosphate mines, but locals living around the Compagnie des Phosphates de Gafsa, the giant state-owned enterprise that monopolizes Tunisia's national phosphate mines. In the past few years, local people have repeatedly besieged the mine, blocking the transportation of ore in and out, disrupting normal production, and making it impossible to get out of Gafsha even if there is a mine. What's even more ironic is that the miners working in Gafsha support these demonstrators who disrupt their work and are as close as brothers to the demonstrators. But the most ironic thing is that the farce staged regularly by locals is not motivated by their deep hatred for the Gafsha Phosphate Mine Company, but by the application letters they hand to the company.

In the impoverished south of Tunisia, apart from mining phosphate rock, the remaining economic activity is to "export" various daily necessities to the Libyan refugees fleeing. The miners' income of 700 euros a month is three times that of Tunisia's per capita, so working as a miner at the Gafsha Phosphate Mine Company has always been a dream job for local Tunisians. Modern mechanized mining allows one worker to mine hundreds of tons of raw ore in a day, and processing and processing requires only a small number of engineers to supervise equipment. The labor demand in Gafsha simply cannot absorb the huge local unemployed population. For this reason, locals who want to find a job as a miner can only resort to forceful means.

Since the Ben Ali regime, local residents and miners have jointly organized a labor movement through the Tunisian Union Générale Tunisienne du Travail to demand the Gafsha Phosphate Company to expand employment. But under Ben Ali's iron-fisted rule, the police were immediately dispatched once the labor movement took off. Although the Tunisian Federation of Trade Unions with one million members is the monopoly union in Tunisia, its political capital is quite limited under Ben Ali. But after the Jasmine Revolution, the Tunisian Federation of Trade Unions transformed into a civil society organization that dominates the ups and downs. In 2013, it became a member of the National Dialogue Quartet that drafted the constitution. For this, it even won the 2015 Nobel Peace Prize. .

But in this day and age, being a Nobel Peace Prize winner seems to mean not living up to the name. The Tunisian Federation of Trade Unions did not respond as expected. Under the banner of opening a new era, the Federation of Trade Unions has elevated almost any labor dispute to the level of democracy and dignity. The locals in Gafsha also regard revolution as a panacea to solve everything, and are eagerly waiting to enjoy the fruits of all social problems after the revolution. The principles of economics were unmoved. The result of repeated strikes is not to increase employment, but to bring the Gafsha Phosphate Mine Company, which local people depend on for a living, to near bankruptcy. Repeated strikes have caused the company to invoke force majeure many times, making it unable to execute the contract and deliver phosphate ore. The Gafsha Phosphate Mine Company, whose life is hanging by a thread, can only rely on government subsidies to survive. By 2020, Tunisia, once the world's fifth-largest producer of phosphate rock, became a phosphate rock importer. What is unfolding in Gafsha is a textbook tragedy of the commons.

State-owned enterprises have become targets of exploitation, and passers-by want a piece of the pie. Locals view the Gafsha Phosphate Mine Company itself as a readily available mine, and the resources extracted are jobs and income. Industrial output and economic efficiency were put behind the scenes. If Gafsha does not provide enough employment for commercial reasons, the General Trade Union blames the government for its incompetence. In the absence of effective rule of law and a modern state, Tunisia's democratic government allows trade unions and locals to use political means to force state-owned enterprises to expand employment and provide jobs, ignoring economic principles and the overall national situation. However, the expansion of recruitment that violates economic incentives will be short-lived. The miners will soon be fired or owed wages due to the dilemma of the Gafsha Phosphate Mine, triggering the next round of demonstrations. The only constant is the decline of Tunisia's phosphate industry.

The decline of Tunisia’s phosphate mining industry is a microcosm of the Tunisian economy as a whole. The Ben Ali regime left behind a legacy of clientelism and nepotism, while the new post-revolutionary regime adopted a democratic system before establishing a legal society and an independent professional bureaucracy. The result is, as expected from modern economics and political science, an inefficient, incompetent, and low-income crony democracy. In the eyes of citizens, the main function of the state is to distribute limited resources, rather than to protect property rights and economic systems, provide public goods, and guide the economy. The point of voting and political power is to ensure that you get a share of the country's resources. Politicians are elected not because they have similar policy views, but because they ensure that they will distribute jobs to their constituents after being elected. This kind of crony politics that distributes resources has almost become the standard political system in low-income emerging democracies, and it can almost guarantee that these countries will be trapped in poverty for a long time and cannot extricate themselves.

The Ben Ali regime, which is also a nepotism, was able to escape this disaster precisely because its dictatorship inadvertently limited the extent to which the country's public resources could be exploited. Under Ben Ali, only a handful of the regime elite and their political acolytes enjoyed the opportunity to carve up the country's resources. Although the country is still regarded as a mine that can be exploited by others, the number of people sharing the pie is relatively limited, and they all rely on the favor of the Ben Ali regime and the protection of the military and police, allowing the country and the bureaucratic mechanism to maintain a certain degree of independence. It will not completely fall into the hands of many interest groups. Ben Ali, who controls the whole country, regards "public lands" in the eyes of the people as private property, and instead has economic incentives to protect public resources and national industries. As institutional economist Mancur Olson predicted, rogue bandits who have long occupied owned resources will turn into "sitting bandits" who carefully cultivate economic potential. The Jasmine Revolution completely disrupted the delicate balance that maintained Tunisia's economic operation. The new democratic regime, which lacked a sound political economy, inadvertently legalized and institutionalized the division of spoils between bandits.

The reason why rogue bandits were able to share the spoils was that the state machinery was too weak to protect itself. The state apparatus used to undermine citizens' rights during the Ben Ali era was hated by the Tunisian public and was greatly weakened after the revolution. But this has caused the civil society that originally advocated for various social interests to expand instantly, allowing one-sided interest groups behind it to monopolize policies. Those who hold power are not the faction with the largest number of people and the greatest needs, but the faction with the loudest voice and the best organization, such as the Tunisian General Union of Trade Unions. However, after the one-sided interests represented by the Federation of Trade Unions took control of the political situation, its policies only reflected the interests of workers and ignored the overall economic situation and general equilibrium results.

This is the result of the theory that democracy is omnipotent and the state is the evil that the Western media preached in 2011 when Ben Ali stepped down. The reason why mature democracies in Europe and the United States have been able to avoid this disaster is precisely because their civil society is restricted by the state and a series of related systems. The well-capitalized chambers of commerce effectively fought against the power of trade unions; at the same time, more importantly, the large, independent bureaucracy became a separate political force, protecting the operation of the state machinery. Even Fukuyama, who is famous for his end of history theory, has acknowledged and emphasized the importance of state machinery in his recent works. In his book "Political Order and Political Decline", he believes that a successful democratic country can only be born if the state apparatus and the power of civil society are on par with each other. Fukuyama testified that in Poland, where the state power was too weak, the aristocracy reduced the central taxation and conscription power to very little, leaving Poland at the mercy of others; while Russia, where the state power was too strong, inevitably became a totalitarian autocratic country; only Britain, with equal power between the two, developed a sound democracy.

What is quite ironic is that after Tunisia weakened its state capabilities, the scope of the state continued unabated. After the revolution, Tunisians expected the country to solve all problems in life because the country became democratically elected. From employment issues to food prices, Tunisians after the revolution looked to the state to solve everything. But Tunisia’s state apparatus, like most Arab countries, lacks the ability to govern. It also lost a lot of power during the revolution and is simply unable to meet Tunisians’ current expectations of it. Tunisia's failure is a failure of the state apparatus.

In the warm winter of the Mediterranean in January, thousands of Tunisian youths took to the streets across the country, shouting protest slogans and demanding that the government provide a glimmer of hope for their stagnant careers and lives. The government quickly deployed police to maintain law and order, but this also led to a confrontation between the two sides. The situation quickly intensified, and demonstrators began to set fire to the streets, looted stores, and violently clashed with the police. Soon the government announced a curfew and thousands of demonstrators were arrested. Western countries did not issue a single condemnation. The riots were not the Jasmine Revolution in 2011, but its tenth anniversary in 2021.