The Tortuous Path to a New Economic Agenda in Egypt and Tunisia

Abstract

Three overarching features characterize the recent economic evolution of Egypt and Tunisia. First, they were the celebrated macroeconomic “success stories” of neoliberalism in the Arab Mediterranean and participated fully in the worldwide economic boom of the 2000-2008 period. Second, the accompanying spread of negative features ultimately underpinned the uprisings of 2010-2011, including unemployment, especially among educated youth, poverty, especially in the neglected hinterlands, expanding informal sectors, corruption and cronyism, electoral fraud, and repression of labor, civil society organizations and political opposition. Third, as of March 2014, none of the governments that followed the ousting of the Mubarak and Ben Ali regimes had presented a coherent program for more equitable and sustainable economic transformation, while political turmoil, violence – two political assassinations in Tunisia and the overthrow of the elected president in Egypt -- and instability prevailed. Aside from the perpetuation of stagnation in an atmosphere of mistrust and uncertainty, there was a spectrum of possible approaches for economic transformation. From “right to left” these included (1) neoliberalism with an inclusive mask, as promoted by the IFIs and Deauville Partnership, (2) a developmental state and industrial policy in the East Asian mode, (3) a more egalitarian developmental state as proposed by the United Nations Development Program (UNDP) and International Labor Organization (ILO), and (4) a citizen-led developmental state as encoded in the work of NGOs and the independent trade union movement.