Tunis, Tunisia – Systemic change is required to tackle Tunisia’s economic crisis, level the playing field and support entrepreneurial Tunisians, small businesses have told Al Jazeera, as the country faces a tumultuous period following the approval of the country’s new constitution in a July 25 referendum.
The 2011 revolution ended Zine El Abidine Ben Ali’s kleptocratic dictatorship but when Kais Saied was elected president in 2019 on an anti-corruption ticket, promising to champion Tunisians, the country was still facing profound economic problems.
Despite his anti-corruption image, since his power grab last July, Saied has closed Tunisia’s anti-corruption authority, which has 20 offices across the country, dedicated to investigating cases of corruption and developing more transparent governance in central and local government.
At the same time, Tunisia has sunk deeper into an economic crisis, as the cost of living has spiked, hitting the poor and middle class alike, amid shortages of basic goods and soaring unemployment.
Retailers say small businesses have been hit particularly hard in the economic crisis as the government has failed to tackle endemic problems that stifle competition and innovation.
“A couple of years ago spinach was two dinars a kilo, now it’s four or five dinars [$1.30 – $1.60] a kilo, but our profit margins go down,” Ahmed Landolsi, who runs a vegetable stall in the half-empty but still grand hall of Tunis’ central market, told Al Jazeera.
“The rent I pay the municipality for my stall keeps increasing, but they don’t help us. The big problem for us traders is the loss of customers – they used to be able to park their cars and come and shop, but they are blocked by the new souq [market] outside,” Landolsi said.
He said legal vendors are struggling to compete with the cheap prices offered by the flourishing informal sector. Outside the palatial central market, hawkers sell cheap imported products laid out on tarpaulins, leaving little space to walk, let alone drive a car.
According to a report by the Carnegie Middle East Center, it is likely that much of the produce on show is smuggled in from Algeria and Libya, but originates from China and Turkey.
Meanwhile, small vendors also complain of being crowded out of the market and forced into bankruptcy by mass producers and state economic policies.
“There used to be 12 egg producers in Ben Arous, now we are only two and if things continue as they are I will be forced to close my business,” an egg producer from the city in northeastern Tunisia, who asked to remain anonymous, told Al Jazeera.
Right now he says he is losing between $2,000-3,000 per day because the state fixes the retail price of eggs and does not allow for fluctuations in the cost of production.
“The problem is not just about the issue of loss. We need capital up front to pay for our overheads, and the price for the machinery, cages, and the chickens is always rising,” the egg producer said:
“[The government should] liberate the price, so it can fluctuate according to demand and the fluctuations in the cost of production and let us make money.”
Houssem Saad, a member of the economic rights association Alert Tunisie, said that big corporate groups selling produce benefit from Tunisia’s state-sponsored food subsidies. Many staples including grain, sugar, coffee and vegetable oil are bought by the state, which sells quotas to a limited group of large traders who can then sell onto the Tunisian market.
“The biggest cost [of egg production] is animal feed and these larger companies are owned by groups that import grain and other materials and sell into the market,” explained Saad.
These state purchasing offices are highly indebted and are forced to borrow from banks at high rates. Alert Tunisie’s research shows these banks tend to be owned by the same groups that also own the companies importing staples such as grain, sugar and coffee.
Meanwhile, the Middle East Institute has reported that Tunisia’s cereals office owes Ukraine alone $300m for unpaid shipments of wheat and barley. Debts like these have given Tunisia a reputation as a bad payer. This makes it harder for the state to source these staples, causing regular food shortages.
Others say that Tunisia’s bureaucracy also stifles innovation.
Technology entrepreneur Fares Belghith told Al Jazeera he wanted to create a logistics app that would have been a sales interface between wholesalers and small grocers but the operation was stymied by restrictive business laws and burdensome paperwork. Simple administrative procedures have still not been digitised, so tasks such as filing financial statements or tax returns still involve waiting in line for hours on end to hand over paper files.
“We had to pivot to becoming a wholesaler ourselves,” he said.
No one from the Tunisian Ministry of Commerce responded to Al Jazeera’s requests for comment.
A mixture of apathy and an opposition boycott meant that most Tunisian voters chose not to participate in the constitutional referendum.
Yet the document will now concentrate executive, legislative and judicial powers unequivocally in Saied’s hands alone – giving him the power to change Tunisia’s economic course.
“The solution is to break the rent-seeking economy and to give people economic rights, the right to entrepreneurship, the right to open a bank account – they didn’t manage to give these rights in 10 years of democracy,” Saad said.
However, Saad is unsure over whether Tunisians will be able to get those rights when President Saied’s new constitution is introduced, with fears that it will entrench power in his hands.
“They didn’t give us these [economic] rights during 10 years of democracy,” Saad reflected. “For sure, fighting for new rights is much harder under a dictatorship.”
