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Development by Free Trade? Développement à travers le libre-échange?

The Impact of the European Unions’ Neoliberal Agenda on the North African Countries Les enjeux de l’agenda néolibéral de l’Union européenne pour les pays de l’Afrique du Nord

Edited By Gisela Baumgratz, Khaled Chaabane, Werner Ruf and Wilfried Telkämper

One year ago the negotiations between Tunisia and the European Union about a deep and comprehensive free trade agreement (DCFTA) had started in Tunis. Experts from both sides of the Mediterranean accepted to contribute to this book in order to foster the public debate in the North-African countries by informing actors of the civil society about the risks of this new generation of free trade agreements of the EU for the respective countries and their population. In fact, by analyzing the impact of the structural adjustment programs of the World Bank and the International Monetary Fund in Tunisia, Morocco and Algeria since the late 1980s followed up by the EU’s free trade policy, the authors seriously doubt about the positive effects on development and prosperity promised by the promotors of free trade. They underline, on the contrary, that it is the EU which profits from the asymmetric power-relations in order to pursue its economic and especially its security interests related to "illegal migration".

Publié un an après le début des négociations sur l’Accord de libre échange complet et approfondi (ALECA) entre la Tunisie et l’Union européenne, cet ouvrage veut contribuer au débat public dans les pays concernés et alerter les acteurs de la société civile sur les risques que comporte cette nouvelle génération des accords de libre-échange de l’UE. Les experts nord-africains et européens réunis pour débattre des enjeux de la politique économique de l’UE vis-à-vis des pays de l’Afrique du Nord mettent sérieusement en cause la promesse de développement et de prospérité du libre-échange. Analysant l’impact de cette politique entamée par la Banque mondiale et le FMI depuis les années 1980 en Tunisie, en Algérie et au Maroc et poursuivie par l’UE, ils soulignent au contraire que l’UE profite de l’asymétrie des relations de pouvoir pour poursuivre ses intérêts économiques et sécuritaires liés à la « migration illégale ».

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Structural Adjustment in Tunisia. The Crisis of Neoliberalism and the ‘Gafsa Riots’ of 2008 (Sascha Radl)

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Sascha Radl

Structural Adjustment in Tunisia

The Crisis of Neoliberalism and the ‘Gafsa Riots’ of 2008

Introduction: neoliberal structural adjustment and the Maghreb

Neoliberal theory goes back to the economists Friedrich August von Hayek and Milton Friedman. Although developed in the 1940s, its first implementation was only possible with the coup of Chile’s General Augusto Pinochet in 1973. Shortly afterwards, Margaret Thatcher as Prime Minister of the United Kingdom and Ronald Reagan as President of the United States (US) were confident that neoliberal restructuring could solve the problems of the economic crisis which had been haunting industrialised countries since the end of the 1960s. Precisely because the term neoliberalism is often used ambiguously, here it is defined according to the geographer David Harvey:

Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices […] (Harvey 2007: 2).

Between the 1980s and 1990s an increasing number of states adjusted their economies in a neoliberal manner and different institutions began to spread the idea. So it became – in a Gramscian sense – a hegemonic concept not only dominating economics but also structuring perceptions within society. Meanwhile the World Bank and the International Monetary Fund (IMF) were responsible for neoliberalising the highly indebted Global South by changing new loans and debt forgiveness against neoliberal Structural Adjustment Programs (SAP).

This resulted in a period of protests in the Maghreb, mainly caused by cutting off subsidies for food or fuel, wage reduction, privatisation and dismissals. Even though the SAPs lead to high economic growth rates and new jobs – and thereby less protests – in the midterm, ultimately they fostered a large low-cost industry, a concentration of prosperity in coastal ← 109 | 110 → regions and impoverishment of large parts of society. Hence, this study will complement the on-going discourse about causes for the current uprisings in North Africa by revealing the socioeconomic impact of the 1980s/90s SAPs on Tunisia, based on reports published by international financial institutions (IFI) like the World Bank or IMF as well as data provided by the Tunisian Institut National de la Statistique (INS). It will be focused particularly on (1) the country’s textile industry which can be seen as the basis of the broad export branch, (2) the vital agricultural sector and (3) the phosphate industry which is one of the few employers in the rural heart of Tunisia.

I will argue that the impoverishment of the subalterns, especially the peasantry and the working class, together with misguided agricultural reforms and following high prices of several foodstuffs, as well as the general marginalisation of the country’s interior have been the main reasons for dissatisfaction of large parts of society with the regime of Zine el-Abidine Ben Ali and ensuing governments. We have seen the consequences of this dissatisfaction during the unrests of the so-called ‘Gafsa Riots’ in 2008 and the overthrowing of Ben Ali in 2010/11.

It should be noted that I only point out the economic changes – here seen as the base – for dissatisfaction and rioting. Concurrently this means that this study does not include detailed remarks on the forming of protest movements, specific juristic-administrative opportunities for demonstrations like e.g. a temporarily weak government, authoritarianism and repression, etc.1 Nevertheless the analysis of economic structural adjustment and its impact on society contributes to the understanding of why people in Tunisia take to the streets enduringly and is able to frame the protests in global neoliberal developments and the consequences of the relationship of dependency between North Africa and the European Union (EU). In this way the understanding of the SAPs also sheds light on the likely impacts of the planned Deep and Comprehensive Free Trade Area (DCFTA).

The 1980s: Bourguiba is facing problems

Different neoliberal institutions such as the World Bank argue that Tunisia like most states of the Global South has faced economic problems in the 1980s, due to its strong dependence on phosphate and oil exports and the drop of international market prices of the latter after the so called ‘oil crisis’2 ← 110 | 111 → accompanied by the outstanding reformation of an economy which was built on import-substitution industrialisation (cf. World Bank 1988: 2). To some degree, this assumption could be considered true – if it is placed in the wider context – but even then it does not explain the high indebtedness of the country.

Figure 1: Sascha Radl: External debts and GDP of Tunisia between 1970 and 1990

illustration

Data: World Bank (2016).

Figure 1 illustrates this more precisely. It shows separately the gross domestic product (GDP) of Tunisia under the rule of President Habib Bourguiba which was strongly influenced by oil exports, and the external debts. The GDP clearly grows until 1980, after that it falls and almost stagnates until 1985, followed by a slight growth until 1988. The relatively weak development from the 1980s onwards is most probably induced by sinking oil prices after the so called ‘oil crisis’ in 1979. Besides the state’s large dependence on natural resources, the long-term impact of the orientation towards the European market and the beginning neoliberal transformation of the world economy should be considered as other causes. The crisis of Keynesianism in the 1970s, caused by several inherent contradictions of Fordism,3 led to a Post-Fordist system which carried first pillars of what is later to be called neoliberalism, thereby influencing ← 111 | 112 → countries of the Global South especially those with strong dependence on the United States of America (USA) or Europe: most industrialised countries answered initially with increasing exports and high national trade barriers to the economic crisis of 1973 (cf. Huffschmid 1989: 44). Because of growing interdependence of global economic relations Tunisia’s export industry and trade balance was also hit by the new European policy. Furthermore, the incipient internationalisation of labour division forced Tunisia’s government to orient the country’s economic structures towards the needs of foreign conglomerates. Thus, protective measures like high customs duties could not be maintained anymore. Together these long-lasting developments had to result in a stagnating GDP and the end of import-substitution industrialisation.

The ‘outdated’ economic structures and the mid-1980s low price for oil also had an impact on the country’s high indebtedness, as shown in Figure 1, but only in so far as the debts increased constantly – this is only found up until 1976 and during the beginning of the 1980s. This means that both periods characterised by a sharp rise of Tunisia’s debts, 1976-1979 and 1984-1987, can neither be explained fully by the drop of international oil prices because this precisely happened from 1981 – above all from 1986 – on and was initially decelerated by reserve assets, nor by the direct impact of the global crisis of Fordism on import-substitution industrialisation as it was a slow process. To solve this problem, we have to pay attention to another consequence of the end of Fordism, namely the beginning of the neoliberal turn of the US-financial policy.

After termination of the Bretton Woods arrangement, capital markets were almost “flooded” (Overbeek 2008: 122) by US-Dollar revenues accumulated by the Gulf States so that banks gave very cheap loans to governments and companies in the Global South. By the end of the 1970s, the US-Federal Reserve Board (FRB) straitened its lending strategy and in 1984, President Ronald Reagan started the so called ‘Star Wars Programme’, the Strategic Defence Initiative (SDI), an arms programme by which the US needed a large amount of new loans. In consequence the adjustable international interest rates increased heavily at the end of the 1970s and again in the middle of the 1980s, so that a great number of states including Tunisia faced a sudden excessive indebtedness which only could be solved by the IMF’s and World Bank’s refinancing strategy: new loans and SAPs (cf. ibid.: 122-124). This radical break of Tunisia’s economic policy also marked the end of the rule of President Habib Bourguiba who refused further implementation of new neoliberal reforms. His removal was conducted by Prime Minister Zine el-Abidine Ben Ali in 1987. As an approach so solve the crisis, he directly continued the economic reform process which was immediately rewarded by the IFIs with massive debt forgiveness between 1989 and 1994 (cf. World Bank 2016). ← 112 | 113 →

Wage reduction and softening of the labour law in the textile industry

One main aim of the World Bank was to strengthen industrial exports. Therefore Tunisia had to devaluate the Dinar which simultaneously decreased the price of exports, increased the price of imports and also diminished the actual wages. So wages of industrial workers have been declining continuously since the 1990s: supported by currency devaluation of 54%, labour costs decreased from 2.81 USD per hour in 1990 to 1.65 USD in 2000 (cf. Someya et al. 2002: 15). In addition to that, the World Bank, accompanied by the European Community (EC), aimed at further improving the ‘locational advantages’ of Tunisia, which meant building up an industrial sector where not only ‘human capital’ is cheap but also a sector with low taxes and without laws regulating the situation and employment of labour as for example the right to choose independent workers’ representatives or high security restrictions.

The result was the establishment of Special Economic Zones (SEZ, Parcs d’Activités Economiques) in Bizerte and Zarzis in which the normal labour code is not valid. Hence it is now possible to avoid for example the comparatively high dismissal requirements, since they have been criticised often by private firms (cf. Hibou 2011: 172-170). Equally important is the fact that companies also enjoy tax exceptions.

Beatrice Hibou describes the conditions inside SEZs as follows:

[A]ccess is denied to persons not belonging to the enterprise, […] the walls have been built so high that nobody can see the factory from outside, people are forced to work behind locked doors and with barred windows […] (ibid. 164).

With officially about 52,000 new textile and clothing workers between 1995 and 2001 the number of people working in that sector increased, as Figure 2 shows. Certainly, this data also includes the number of workers in private companies as a result of former public companies being privatised. But the share of people working in the textile and clothing industry compared to other privatised industries also increased heavily – from about 27% in 1985 to 41% in 1995 (cf. Someya et al. 2002: 7). ← 113 | 114 →

Figure 2: Official numbers of formal workers in the private textile and clothing industry between 1996 and 2010

illustration

Source: INS (2016).

As mentioned before, the textile sector is based on cheap labour and does not need highly educated workers. So the percentage of workless people with basic education fell from 19.5% to 17.6% between 1997 and 2001. On the other hand the number of people with higher educational degrees increased by about 2.5% (cf. World Bank 2004: 66-79). This points out why so many well educated Tunisians are jobless today: the new economy is simply based on cheap mass production and has no place for graduates with higher educational degrees.

EU-Association and the end of the Agreement on Textile and Clothing

From early on it was obvious that the SAPs intended to deepen Tunisia’s economic orientation towards the EU-market: In 1984 the country was the 7th most important exporter of textiles, by 2000 it occupied the 4th position (cf. Someya et al. 2002: 10). In 1994/95 80% of all Tunisian exports were directed to the EU (cf. Jbili, Enders 1996: 19). So the country was and still is completely dependent on the European market. Because of the EU-Association Agreement of 1995 and the previous Investment Initiative Code with numerous advantages for exporting companies, the EU could expand its powerful position. Also the IMF supported the Association Agreement in its reports because it “would […] enhance existing investment incentives, such as Tunisia’s relatively low labor costs and its proximity to European markets” (ibid.: 20). But with the beginning of the 2000s, predictable problems occurred and brought to light the economic disadvantages of the neoliberal policies: ← 114 | 115 →

1. In 2005 the Agreement on Textiles and Clothing (ATC), which exceeded the Multi-Fibre Agreement (MFA), expired. This implied the revocation of all quotas on textile exports to the EU which meant a great improvement of market access for mostly Asian countries like Pakistan, India and China.

2. The Association Agreement became effective entirely in 2008 which meant custom-free trade between Tunisia and the EU – in other words increased competitive pressure on the Tunisian economy. Agricultural exports were excluded because of the disadvantages for the productions of the countries of the Northern Mediterranean shore.

Figure 3 shows the textile, clothing and leather exports of Tunisia. They increased until 2001, followed by a weakening – almost stagnation – between 2001 and 2006, with new growth in 2007 but finally followed by a clear decline. The same development is presented in Figure 2, concerning the number of workers in private textile and clothing companies: with about 4,200 dismissals from 2002 to 2006, and again with more than 10,800 between 2008 and 2010, the number of workers decreased clearly. This data is the official one for formal work in the private sector, given by the INS. So the real number of dismissals has to be set much higher. Abdeljelil Bédoui estimated a loss of 200,000 jobs (public and informal work included) and the closing of one third of textile and clothing companies (cf. Bédoui 2000: 15). Lilia Ben Salem estimated 600 shutdowns of factories even a few years before the end of the ATC, combined with about 35,000 dismissed women (cf. Ben Salem 2010: 12-17). Together, the numbers refer to the declining textile and clothing industry as a consequence of new competitive pressure from more competitive, mostly Asian countries and their newly enhanced market access to the EU and with it also to Tunisia.

Figure 3: Exports of textiles, clothing and leather between 1993 and 2010 in Million Tunisian Dinar

illustration

Source: INS (2016). ← 115 | 116 →

The basic problems also become apparent in the trade balance in Figure 4: indeed, Tunisian exports have been increasing since structural adjustment and EU-association but so did the imports. Exports as well as imports mainly consisted of manufactured goods but there is a significant difference: Tunisian exports consist of cheap textiles and imports of expensive heavy machinery from the EU – a development facilitated by the Association Agreement. The SAP’s focus on cheap manufacturing combined with external pressure on the local textile and clothing branch is expressed in the strong increasing trade deficit from 2005 onwards.

Figure 4: Exports, imports and trade deficit of Tunisia between 1993 and 2010 in Million Tunisian Dinar

illustration

Source: INS (2016).

Another direct impact of the Association Agreement on Tunisia that I will mention here is the loss of governmental revenues. Until 1995, more than 26% of Tunisia’s income was based on taxes on international trade. Since free trade with the EU this amount decreased rapidly to about 6% in 2010 (cf. World Bank 2016). Therefore, the government was not able to maintain programmes which could have absorbed social and economic implications as for example caused by the end of the ATC.

To sum up, the outcome of the SAPs in the textile and clothing sector has been a low-wage industry largely based on unskilled labour and nearly completely aligned to the EU. In 2005, the ATC expired and clothing commodities from Asia have been competing for the European market with North African products. Not later than since full implementation of the EU-Association-Agreement in 2008, industrial imports from the EU have been flooding the domestic Tunisian market. Together these events caused a vast trade deficit and competitive inability in line with a high rate of unemployment among already poor workers. ← 116 | 117 →

Agricultural production before, during and after liberalisation

The basic reforms proposed by the World Bank were included in the Agricultural Adjustment Loan (AAL) one and two: Liberalisation and an end to subsidies, the sector’s full adjustment on exports, adaption of producer prices to global markets, a drop of wages and cutting 80,000 jobs (cf. World Bank 1988: 1-27). Even if the World Bank’s reports state that the situation could be worse without SAPs, they confess as early as 1988 that by now “the poor will be affected by the reduction in consumption subsidies and unemployment will persist as a problem” (ibid.: 10).

In the following I will demonstrate the long-term outcome of the SAPs in the agricultural sector by taking wheat as an example because of its strategic importance as one of the most consumed basic foodstuffs.

Figure 5: Cultivation of wheat between 1965 and 1987

illustration

Source: FAOSTAT (2014).

Figure 5 shows the amount of wheat seeds in tons as well as the harvested area of wheat in hectares during the rule of Bourguiba. Until 1978 both, the calculated yearly average of 77,700 tons of sown seeds and 891,000 hectares of the harvested area was much higher than the amount – 69,800 tons and 804,000 hectares – of the ensuing period from 1978/79 until 1987. Figure 6 compares sown wheat seeds in Tunisia to the international market price. The first period clearly shows a strongly positive correlation: High market prices were followed by high production. Regarding strategically important crops like wheat this governmental policy makes sense because of the ‘Natural Hedge’-effect which says that in less integrated, local markets an increasing production leads to falling prices for consumers (cf. Maurer 2014: 143). By contrast, the second period from 1978/79 onwards, the picture changes: high market prices were followed by low production. ← 117 | 118 →

Figure 6: Wheat seeds in tons compared to the international market price of wheat in USD between 1965 and 1987

illustration

Source: FAOSTAT (2014).

It can be concluded that wheat production was considerably reduced by the end of the 1970s caused by the changing landownership and beginning liberalisation: until 1984 about 400,000 hectares of state owned land were privatised and in 1989 28% of farmland was owned by owners who had more than 100 hectares (cf. King 2003: 35-41). This means that first liberalisation attempts handed over control of agricultural production to the arising private sector – a policy change implemented since Bourguiba’s removal of Ahmed Ben Salah and with him the abandoning of the ‘socialist experiment’ (cf. Willis 2014: 232-233). Before, farmers were sure of having the government as main buyer of basic foodstuffs and in case of low international prices also as a financial supporter. As liberalisation meant a freer formation of prices, cultivation was now much more dependent on planting ‘crash crops’ and finding new buyers, both influenced by global developments. So, negative correlation of wheat production and international market price in the second phase can be explained most likely by the new uncertain and complex system of global instead of ensured, mostly governmental demand. In addition, on a more general level, the long-term decline of wheat cultivation was caused by the lower price of basic foodstuff compared to expensive crops like fruits, dates or fresh vegetables. ← 118 | 119 →

Figure 7: Cultivation of wheat between 1987 and 2010

illustration

Source: FAOSTAT (2014).

Figure 7 presents the relation between wheat seeds and the harvested area during the rule of Ben Ali from 1987 until 2010/11. Also here wheat cultivation, a yearly average production of 74,500 tons of seeds, was higher in a first period until 1995 than the average cultivation of 65,700 tons in a second half from 1996 on. Furthermore, the considerable ups and downs in wheat harvests mark the beginning of climate change: since the 1980s, crop failures tend more and more to be a global phenomenon. According to climate researchers like Leila Radhouane, rain will be absent even more often, periods of drought will happen regularly, longer and stronger in Tunisia’s future. The water resources will fall by about up to 28%, especially in the South (cf. Radhouane 2013: 103-108).

The calculated correlation between wheat seeds and international market prices in Figure 8 again shows a positive correlation in the first phase until 1995, followed by a negative in the second. ← 119 | 120 →

Figure 8: Wheat seeds in tons compared to the international market price of wheat in USD between 1987 and 2010

illustration

Source: FAOSTAT (2014).

So, as a result of his experience as Minister of the Interior under Bourguiba, Ben Ali likely tried to achieve food security at the beginning of his own rule – in 1984 riots broke out against the high prices for bread as a consequence of the abolishment of subsidies as demanded by the SAPs. So Ben Ali tried to consolidate his rule without making the same mistakes as Bourguiba. But from the mid-1990s on, he was forced – to some extent also willing – to strictly implement SAPs in the agricultural sector as the above data show. The subsequent break of 1995/96 marked a further step of the full neoliberalisation of the agricultural sector which also included governmental support for large modernised farms willing and able to cultivate expensive products for exportation.

From the neoliberal viewpoint, large-scale seems to be more successful than small-scale farming: big agricultural enterprises have the means to buy heavy machinery, pay for land as well as water, use new technologies and are able to develop capabilities for marketing. Thus, trade balance should improve and cheap basic foodstuffs like wheat could be imported without causing a trade deficit. In addition, compared to government controlled agriculture, neoliberal strategies do not prevent the private sector from making profits (cf. Ayeb 2012a: 5-8). For Tunisia one of the consequences is the clearly increasing area of harvested olives while the one of wheat decreased, as seen in Figure 9. ← 120 | 121 →

Figure 9: Harvested area of wheat and olives between 1987 and 2010

illustration

Source: FAOSTAT (2014).

In 2007/08 this strategy turned out to be vulnerable for the globally integrated Tunisian agriculture and the local food supply, when the price of wheat in the world market peaked mainly caused by speculations (cf. Bass 2011: 27-36). By this time, the already low Tunisian wheat production decreased as shown by Figure 7 and 8. As a result, large parts of society could no longer afford to pay for the high prices of bread and similar basic food. It should have been obvious that the neoliberal idea of compensating expenditures for the import of foodstuffs with high-price export does not work.

All in all, agricultural data during the rule of Bourguiba shows the initial attempt of achieving food safety with high numbers of yearly wheat seeds, vast harvested areas and increasing production but it also gives evidence to the beginning implementation of liberalisation which took place along with the above described rise of neoliberalism. Because of the exceptional importance of cheap food Ben Ali’s policy was mainly guided by food safety until the beginning of the 1990s but was followed by strong liberalisation as demanded by the World Bank. This opened the doors to large modernised farms, adjustment of local food prices to fluctuating global market prices and the declining cultivation of wheat. From now on the country was constantly threatened by the lack of basic foodstuff due to liberalisation, financial market speculation as in 2007/08 and climate change.

Unemployment and marginalisation in central Tunisia

Besides the impact on agricultural production, the SAPs also strongly influenced the life of farmers. Geographer Habib Ayeb describes the struggle ← 121 | 122 → for survival of small-scale farmers pointing out the “[u]nequal and fearsome competition for agricultural resources between millions of peasants […] and capitalist investors” (Ayeb 2012a: 7). According to him, the Tunisian oasis of Gabes is just one example where small-scale farming is threatened by modernised large-scale agriculture in the periphery of the oasis, made possible by high investments of urban investors like businessmen, former state officials or wealthy returnees from abroad. These farms have the capabilities to tap deep water in semi-arid regions while peasants lose their natural water resources like rivers and small wells. Another issue is the unplanned urbanisation and the increasing chemical-industrial sector which has been polluting the environment since the 1960s (cf. ibid. 2012b: 86-94). A similar example is the oasis of Tozeur. Also here modernised large-scale farming and urbanisation is threatening peasantry. New large-scale farms at the periphery of the oasis use deep water sources for irrigating water-intensive but highly exportable dates of the Deglet Nour-palm. But in addition to that, a tourist park with luxurious hotels and even a golf course were built. Because of the privatisation of water it seems to be impossible for small-scale farms to get enough water so that peasants would be able to provide food for their families and gain some income (cf. Battesti 2011: 6-17). Alila Gana studied the increasing local adjustment of the production to export crops instead of planting cereals or raising traditional livestock in Bir el-Machariqa in Zaghouan. Because of revoked subsidies, liberalisation and privatisation, peasants lost their land and men were forced to migrate to find work in large urban areas while women and children usually stayed for working as seasonal labourers on mostly olives planting large-scale farms (cf. Gana 2002: 200-206).

These are just some examples of the social outcome of the agricultural SAPs and general neoliberal modernisation of Tunisia’s economy, particularly in the central provinces. Expressed in numbers it means that especially those governorates with high shares of people employed in the agricultural sector, i.e. Bejah (37.3%), Jendouba (39.2%), Sidi Bouzid (37.5%) and Kébili (33.8%) (cf. INS 2016), have negative rates of migration within the country’s borders. In 2004, the INS found out in a survey that about 104,000 people migrated from the interior to the urban areas of the coast line, of these people 78.6% – highest in Kairouan with 85.2% and Sidi Bouzid with 86% – because of unemployment (cf. ibid.). According to the African Development Bank (AfDB) which calculated the local poverty rates in 1990 and again in 2000, the Tunisian government “could not claim any success in reducing relative deprivation and social exclusion” (AfDB 2011: 7). In Zaghouan, relative poverty during these years increased by 7.9%, in Kasserine by 19%, so that it reached 49.3% in 2000. In Sidi Bouzid the poverty rate grew from 39.8% to 45.7% (cf. ibid. 9).

These cases illustrate the direct link between structural adjustment focused on export-orientated large-scale farming, impoverishment and the migration to urban areas of Tunisia’s peasantry. Therefore it appears consistent that especially the rural population experienced starvation and increased dissatisfaction with the regime of Ben Ali. ← 122 | 123 →

Neoliberal restructuring of the mining sector and the riots of 2008

Regarding the phosphate mining sector, the World Bank demanded strategies for “restructuring and rationalization” (Saghir 1993: 3): beginning with reducing payments to compensate losses of the public sector, this was followed by large waves of dismissals (cf. World Bank 1988: 9). For example the most important employer of the region, the Compagnie des Phosphates de Gafsa (CPG), shrunk from 14,000 workers in 1980 to just 5,853 in 2006 (cf. Beaugé 2008; Gobe 2010: 4). Therefore, unemployment in main mining regions like Redeyef or Moularès rose up to officially 26.7% and 38.5% (cf. Gobe 2010: 4-8). The World Bank expected the possibility of “social and political difficulties, especially with the phosphate mines, which are the main source of income for a whole region” (ibid.) but it did not develop any counter-actions like e.g. new comprehensive job programmes. Instead, welfare state-institutions and social benefits in the region have been reduced continuously since the second half of the 1970s – deeply linked to the decline of the CPG (cf. Allal 2008).

Nevertheless, especially from 1995 onwards, production of phosphate increased strongly as shown in Figure 10. Revenues made by phosphate exports rose from 669.9 Million TD in 1997 to 765 Million TD in 2001 (cf. World Bank 2004: 51-82). As a consequence of the SAPs and the use of new technologies and modernised machinery, former workers and their families living around Gafsa could not have their share of the increasing profits of the mining companies. In addition to dismissals, labour force increased at the same time, between 1997 and 2001, by 7% in rural areas and by 15% in urbanised regions so that more people than before entered the labour market (cf. INS 2016).

Figure 10: Official CPG-production of phosphate between 1975 and 2009

illustration

Source: CPG (2009). ← 123 | 124 →

The overall situation clearly was a problem leading to discontent but it was worsened by heavily increasing international market prices of phosphate between June 2007 and the end of 2008: as seen in Figure 11, the prices raised more than nine fold and again ordinary people did not profit. As a response, the CPG offered merely adequate 81 new jobs in the end of 2007. In order to put up with the above described increasing costs of bread in 2007/08, finding an employment was crucial – here especially the CPG is important because general working conditions are relatively better and wages are higher than the income generated by smuggling or by work for the numerous subcontracting companies in the region (cf. Gantin/Seddik 2008). This is why about 1,000 people applied for the available 81 jobs. After the announcement of the names of newly hired persons, rumours about a corrupted recruitment process occurred, followed by the first protests in the city of Redeyef on January 5, 2008. Until April, demonstrations as well as hunger strikes took place in all larger cities close to the mining region and people occupied buildings of the CPG and the trade union federation Union Générale Tunisienne du Travail (UGTT). Meanwhile, one of the movement’s speakers, Adnane Hajji, claimed that the hiring process was an issue of “corruption and nepotism” (Hajji cited in Beaugé 2008; cf. Gantin/Seddik 2008; Schmid 2008). A growing number of people joined the protests so that the regime answered with police force and waves of arrests – in May one unemployed young person was killed (cf. Gantin/Seddik 2008). In June, officers shot randomly at a demonstration and captured insurgents, among them Adnane Hajji (cf. Nawaat 2008). Further riots arose when the court sentenced the movement’s leaders to longstanding imprisonment but they were no longer able to threaten the regime (cf. Schmid 2009).4 ← 124 | 125 →

Figure 11: Sascha Radl: International market price of phosphate between 2000 and 2010

illustration

Data: World Bank (2016).

While the anger of the people was driven by poverty, starvation, and strong marginalisation it also has to be emphasised that the comparatively successful predecessor movement of the uprising in 2010/11 was only possible because it started during a time when the regime was considerably weak. The global increase of wheat prices meant that governmental revenues – which were already low because of narrowed taxes on trade and other business activities – were diminished because of expensive food imports. In addition, the country was slowly hit by the economic crisis starting in 2007/08. Therefore it was hardly possible for Ben Ali and his government to assuage the protesters by providing new jobs in the public or private sector and co-opting leading figures.

Conclusions: the contradictions of two decades of neoliberal structural adjustment

Decades of structural adjustment laid the ground for growing dissatisfaction in Tunisia: peasants lost their land and income in the rural areas so that their only option was to migrate to the urban centres. There, some found new jobs in the low-paid manufacturing industry. Competing with a great number of other subalterns, people were forced to accept inhuman working conditions and further wage reductions which also affected their families being dependent on remittances. From the beginning of the 2000s, textile and clothing factories dismissed a large part of their employees, as did the ← 125 | 126 → public mining companies since the 1980s. The situation was worsened by starvation caused by failed agricultural policies. These circumstances directly resulted in the so-called ‘Gafsa Riots’. Interestingly, as early as 2008, Karine Gantin and Omeyya Seddik described “détermination et dignité” (Gantin/Seddik 2008), determination and dignity, as the basic claims of these early protests and anticipated the paroles of the so-called ‘Arab Spring’ in 2010/11.

Against this backdrop, the uprising in 2010/11 again highlighted the marginalisation of Tunisia’s central provinces. The waves of protests started in Sidi Bouzid, one of the most neglected cities in the centre. The demonstrations found sympathisers not just in the urban low-paid sectors but also in the country’s middle class, building on the widespread dissatisfaction caused by neoliberalism and the declining socio-economic situation. However, the two main parties of post-2011 Tunisia, Ennahda as well as Nidaa Tounes, still rely on neoliberal policies and signed letters of intent followed by new SAPs (cf. IMF 2015).

As a result, the deep-rooted problems are far from being solved: smugglers and religious extremists are rioting in the mountains of Chaambi. Severe poverty provides a base for the popular support of fundamentalists. Thousands of Tunisians are imprisoned because they wanted to leave the state to join the IS in Libya or Syria. Most of them suffered from social marginalisation and the current economic downturn so that recruiters close to the IS do not have difficulties finding new fighters by promising a small salary and providing a community of solidarity (cf. al-Mukhtar Ahmed 2014). Seif ed-Din Yacoubi, the assassin of the Sousse attacks in 2015, who was born in neglected Siliana and studied in Kairouan, is just one example.

Other indicators of marginalisation are the subalterns’ constant protests and violent disputes with security units in Tunisia’s central provinces. When the Tunisian government published its plan to build a wall at the border to Libya, people in this region expressed their dislike by blocking off roads. They explained that the plan is an “unilateral governmental decision that will deepen the marginalisation and the restrictions on livelihoods in the absence of developmental alternatives” (Middle East Monitor 2015). In April and May 2015, local youth blocked the production sites of important phosphate mines and demanded job opportunities (cf. Byrne 2015). With the absence of tourism in the aftermath of the Sousse Attacks, farmers lost important consumers while their production costs and indebtedness remained high (cf. Nawaat 2015). In September 2015, they protested under the slogan “day of farmers’ discontent” (ibid.) in the streets of Tunis. In January 2016, large waves of demonstrations began in the city of Kasserine, spilling over into neighbouring towns and into the poor suburbs of the capital turning violent. Protesters demanded “work, freedom, dignity” (Saleh 2016).

With the beginning 21st century, the neoliberal system unveiled its inherent contradictions in Tunisia: the competition for investments between the provinces reinforced the predominance of the cities of the coast line above the ← 126 | 127 → impoverished inner provinces. The ensuing migration of the rural population to the urban areas required new job opportunities but employment creation failed because of the country’s strong dependence on the EU-markets and them being taking over by less expensive Asian exports. The use of new technologies, as e.g. launched in the mining sector, increased pressure on new hiring. Simultaneously, the wages of the still existing broad low-cost branches turned out to be too marginal to nourish the population so that further reductions were hardly possible. As a consequence, companies left the country.

Since 2007/08, neoliberalism has been losing its hegemony in Tunisia’s society but the regime of Ben Ali as well as succeeding governments and economic elites were not able to transform the economic system – also because of the EU’s unwillingness to do so. The planned DCFTA offers a way out of crisis for European transnational business by opening up new segments to neoliberal accumulation which would be followed by new processes of impoverishment and a strengthening of reactionary politics. At the same time, the crisis of neoliberalism, clearly perceptible not only in North Africa but also in countries such as Spain, Italy and Greece, could give rise to a new balance of power lead by subaltern forces. Therefore it is needed trans-Mediterranean cooperation on a grass-root level.

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1 For instance repression and different ways of dependency between the regime and society as e.g. caused by heavy indebtedness are analysed in Hibou 2011 while aspects like the foreign policies of the US and France towards Tunisia, media and the forming of social movements are included in Gana 2013. Beinin 2016 describes the contemporary role of labour movements.

2 The term ‘oil crisis’ is Eurocentric because it only contains the negative perception of the industrialised countries and does not include the positive effects on e.g. oil-exporting states.

3 Fordism is named after the American industrialist Henry Ford and refers to a regime of accumulation between the 1920s and 1970s which was built on mass production by technical innovation and relatively high wages to ensure consumption inside the own domestic market. Governments implemented Keynesian measures while trade unions were generally strong (cf. Overbeek 2008: 171-176).

4 For a comprehensive analysis of the ‘social movement’-character of the riots, see Chouikha / Gobe 2009 and Gobe 2010.