Brookings: Experts - Ragui Assaad

Tunisia After the Spring: University of Tunis El-Manar-Brookings Joint Workshop

Thu, 20 Sep 2012 08:30:00 -0400

Event Information

September 20, 2012
8:30 AM - 6:30 PM EDT

Tunis, Tunisia

Tunisians are concerned about political and economic management during the post-revolution transition. They agree that the transition process is going to be long and filled with uncertainty and that even regression is a possibility. In addition, the economic situation has deteriorated since January 2011 and may deteriorate even further. Despite these challenges, they remain optimistic that over time they will build a well-functioning and prosperous democracy. These are the main messages that came out of a one-day workshop organized jointly by the University of Tunis El-Manar and the Brookings Institution on September 20 in Tunis, which brought together a large number of academics, students, civil society activists and donor organization representatives. Civil unrest and attacks on the United States embassy and the American School in Tunis in response to an anti-Islam movie, which occurred less than a week before the workshop, underlined some of the risks facing the transition in Tunisia and heightened the sense of uncertainty. Arguments about the government’s handling of the situation demonstrated the deep cleavage between secularists and Islamists in Tunisia.

The year 2011 was difficult for the Tunisian economy. Uncertainty associated with the revolution as well as the recession in Europe, Tunisia’s main trading and investment partner, led to a sharp drop in economic activity. Real GDP, which was growing at a healthy 5 percent before 2010, fell by nearly 2 percent in 2011, while unemployment jumped from 13 to 19 percent with unemployment rates for educated youth higher than 30 percent. Exports, tourism revenues and foreign direct investment fell sharply, leading to a widening of the current account deficit from 1 to 3.5 percent of GDP (the deficit is estimated at 7 percent of GDP in 2012). Thus, foreign reserves fell from the equivalent of six to nearly three months of imports. Widening fiscal and external deficits are coupled with a weak banking sector portfolio, which may justify some concerns about Tunisia’s macroeconomic stability.

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Event Materials

How will Tunisia’s Jasmine Revolution Affect the Arab World?

Ragui Assaad — Mon, 24 Jan 2011 14:22:00 -0500

The Tunisian uprising began as a spontaneous protest against unemployment and the shattered expectations of youth in an increasingly educated society with a growing middle class. In less than a month, street protests swept one of the most repressive regimes in the region into the dustbin of history. As news and images of these protests went viral, with the help of social media, cell phones and satellite television, they turned into an indictment of a corrupt dictatorial regime and into demands for freedom and democracy. And many questions remain: Is a peaceful transition to democracy possible? Will Islamists parties acquire a major foothold in the political system? But my main concern focuses on the implications for other countries in the Arab World, such as Algeria, Egypt, Jordan, Morocco and Syria.

The social and economic underpinnings of the uprising are among the important similarities between Tunisia and these other countries. The entire region is suffering from a pronounced “youth bulge,” a period in their demographic development characterized by a historically unprecedented share of youth, between the ages of 15-29. The demographic pressure on education systems and labor markets that this youth bulge represents is seriously aggravated by the collapse of an economic model that essentially guaranteed jobs in the bureaucracy and the state sector to anyone who obtained a university degree—and in some cases even a high school diploma. These long-running policies that were introduced in the 1960s not only resulted in bloated bureaucracies but also shaped the sort of education millions of young people obtained—an education that emphasizes the formal credentials that are useful to get government jobs rather than the productive skills demanded by an increasingly globalized private sector-led economy. When these policies inevitably reached their limits in the 1980s and 1990s, and governments virtually stopped hiring, educated young people found themselves with devalued and worthless educational credentials. They continued, however, to harbor high expectations about achieving middle class status through formal employment. As these expectations increasingly appeared unrealizable, the anger and frustration of educated youth grew. Despite the fact that Tunisia managed to achieve higher growth rates and relatively more economic dynamism than its neighbors, this was not enough to satisfy the unmet expectations of its youth.

Undoubtedly, besides youth frustration and anger, the most important additional ingredient in the success of the Jasmine revolution was the use of new information technologies to quickly spread news and images and to help organize street protests. This ingredient is also present in abundance in other parts of the Arab World. Cell phones and satellite dishes have become ubiquitous all over the region, and internet access and use is spreading rapidly. Facebook and other social networking sites played a major role in previous protests and social movements in the region, like the “April 6th” youth movement in Egypt that organized strikes and protests against rising food prices in 2008; and the subsequent emergence of Mohamed El-Baradei, the former head of the International Atomic Energy Agency, as a prominent oppositional figure. Increasing access and use of these technologies will continue to make it possible for mass protest movements to emerge and grow without the need for organized groups such as political parties and labor unions. Repressive regimes have yet to learn how to effectively counter these information-savvy, youth-led movements.

Another obvious similarity between Tunisia and several of its Arab neighbors is the combination of political repression and corruption on the part of the regime and those close to it. Ben Ali’s Tunisia, however, differed in important respects from the Arab regimes in both the form that repression took and the nature of the regime’s corruption. The Egyptian and Algerian regimes for instance read the signs of the information revolution and concluded that restrictions on free speech were virtually impossible to enforce. Therefore, they began allowing a greater margin of freedom for public debate and expression in independent and opposition newspapers, private (mostly satellite) television channels and the internet. While Tunisia could not completely control the emerging media either, it attempted to maintain highly repressive restrictions on public expression, and to block off any meaningful avenues for people to vent their frustrations by criticizing the regime. This was especially true regarding any form of religious speech and self-expression. The enforced secularism of the Tunisian state thus came to be associated in people’s minds with a corrupt and repressive regime that they despised.

Even the corruption of the Tunisian regime is somewhat different than that of its Arab neighbors. While corruption, clientelism and cronyism are fairly widespread in Algeria, Egypt and Morocco, for example, they involve a large enough swath of these societies that their fruits tend to be more evenly distributed among the middle classes, especially those with ties to the bureaucracy, the military and the security forces. In contrast, corruption in Tunisia appeared to be more concentrated among the president’s family and his in-laws, who gradually monopolized much of the country’s wealth. Many Egyptians, for instance, consider corruption an evil that they must learn to live with. It, therefore, does not elicit the same sort of anger that the corruption of the ruling clan in Tunisia brought forth.

Another difference between Tunisia and its neighbors lies in the role that the military plays in the political system. Tunisia’s regime built its repressive apparatus on the back of the internal security forces and the interior ministry from which President Ben Ali emerged. Its armed forces remained fairly small and apolitical. This is not the case in Algeria, Egypt and Syria, where the armed forces play a much more important behind-the-scenes role in the political system and where, unlike the Tunisian military, they would probably not hesitate to intervene to quash street protests if they were perceived as endangering the status quo.

Given these similarities and differences between Tunisia and its Arab neighbors, it is impossible to predict whether the Jasmine revolution will influence developments elsewhere in the region. Suffice it to say that the authoritarian regimes of the region have heard the message from Tunisia loud and clear and are bound to react to it. But how? Will they begin instituting genuine democratic reforms to diffuse the frustration and anger of their populations? Or will they simply show greater political timidity in the face of necessary but difficult economic reforms and continue to rely on their repressive security apparatuses to squelch any growing protests?

Ragui Assaad is a nonresident senior fellow at Brookings and professor at the Humphrey School of Public Affairs, University of Minnesota.

Authors

Ragui Assaad

Image Source: © Zohra Bensemra / Reuters

Transitions to Employment and Marriage among Young Men in Egypt

Ragui Assaad, Christine Binzel and May Gadallah — Mon, 18 Oct 2010 15:24:00 -0400

Editor’s Note: This working paper is an electronic version of an article published as “Transitions to Employment and Marriage among Young Men in Egypt,” Middle East Development Journal, Vol. 2, No. 1, (2010) 39–88. DOI: 10.1142/ S1793812010000162. (c) copyright World Scientific Publishing Company http://www.worldscinet.com/medj/ .

ABSTRACT—

We examine in this paper the transition from school to work and the transition to marriage among young men with at least a secondary education in Egypt, with particular attention to how the first transition affects the second. In examining the transition from school to work, we analyze the determinants of the duration of transition to first employment after school completion, as well as the type and quality of job obtained in such employment. We then move to an examination of the determinants of further mobility to a second job. In examining the transition to marriage, we investigate the effect of time to the first job and the time to the first good job, if any, on the timing of marriage, controlling for cohort of birth, education, family background and community-level variables.

We find that the duration of transition to first employment has fallen over time primarily because of the reduced availability of formal employment, especially public employment, making it less worthwhile for young men to remain jobless while searching for such employment.

Having access to work in a family enterprise reduces significantly the duration of transition from school to work as does the need to be the main breadwinner of the family. While education beyond the secondary level has no significant effect on the duration of the transition, it does significantly affect the probability of getting a good job and a formal job, as a first job. The hazard of transition to a second job is negatively associated with the time it takes to get a first job, but that is primarily because it is negatively associated with the quality of the first job and the fact that it takes longer to get good first jobs.

Our findings relating to the transition to marriage confirm both the importance of early entry into the job market and of obtaining good jobs for early transition into marriage. However, if delayed entry (due to search) raises the hazard of getting a good job, it may actually be a worthwhile strategy, from the point of view of curbing the delay in marriage, for an individual to spend more time in job search.

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Authors

Ragui Assaad
Christine Binzel
May Gadallah

Publication: Middle East Development Journal

The Paradox of Employment: The Reality Behind Youth Labor Market Statistics in Egypt and the United States

Ragui Assaad and Samantha Constant — Tue, 09 Mar 2010 08:59:00 -0500

As Vice President Biden travels to the Middle East this week, he does so at a time when average citizens of both the United States and the Middle East are more concerned with the economy than foreign policy. If there were ever a moment of convergence between the two sides, it is now with the struggle for a good job and a better livelihood being the top priority on everyone’s mind.

The U.S. Department of Labor’s Bureau of Labor Statistics released its latest employment report for February. It shows that youth unemployment hovered at 18.5 percent—compared to 9.9 percent the same month in 2008—while payroll saw an increase in temporary jobs and part-time services. Not surprisingly, this increase is due to employees experiencing a cut in hours or who have not been able to find full-time employment in a weakened job market.

Young people in the Middle East face similarly disappointing outcomes in the labor market, however they are due to different structural causes. In Egypt, for example, overall unemployment is also high but has been generally declining over the years. Youth unemployment rates stood at 16.7 percent in 2009, which is a significant drop from 25 percent in 1998. Research based on a recent labor market survey shows that this decline in unemployment is paradoxically associated with a deterioration of job quality rather than any major improvement in labor market conditions.[1]

While concerns about the job market are paramount in both settings, the two countries have reached this employment paradox through very different paths. The United States arrives at this juncture as a result of the worst economic recession in 70 years. Underemployment in Egypt, on the other hand, stems from a rapidly growing youth population faced with the consequences of a partial and fragmented transformation of the economy from a state-led to a market-oriented development model.

For example, in Egypt, educated young people who spend years searching for formal employment, mostly in the public sector, are now forgoing this prospect as the supply of government jobs dries up. Formal private sector employment—quite limited in the first place—is not growing fast enough to make up for the decline in good public sector jobs. Hence, young people are left with either precarious informal wage employment or expected to simply create a job for themselves in Egypt’s vast informal economy. As a result, they are not captured as being unemployed in labor statistics, which ultimately contributes to the declining rates.

Today, a similar trend can be found in the United States. The recession has destroyed a large number of good jobs and significantly reduced the rate at which new jobs are created. Young new entrants to the labor market are therefore not only finding it hard to get their first job and are thus unemployed longer, but they are also finding it hard to get anything but temporary and precarious jobs of much lower quality than they had come to expect. While these temporary and part-time jobs are still within the confines of the formal economy, they have a lot in common with jobs in Egypt’s informal sector in their lack of benefits, health insurance, and even a modicum of security.

The similarities in the current situation of young people in both countries, but the divergent paths that brought them to this point, create new space for speculation about future job market trajectories.

In all likelihood, the U.S. economy will resume its growth and will eventually start creating new jobs, but the high cost of health care and continued economic uncertainty may significantly slow the creation of good jobs. Like young Egyptians, young Americans may have to reduce their expectations about the quality of jobs they expect to attain in this current market and hope to upgrade over time. Fortunately with the improvement of information and communication technology in both settings, it is increasingly possible to search for work while being employed.

Although Vice President Biden has had to postpone his scheduled visit with Egyptian President Hosni Mubarak, the U.S. and Egyptian governments can begin to take important steps to improve the situation for young people. As a start, each can pursue policies that encourage employers to create and maintain good jobs. In the case of Egypt, these include reducing the high costs of formality, including the burdens of regulations and taxation that force all but the largest employers into the informal economy. Such costs not only force employers to hire workers informally but also restrict the growth of firms that often stay small deliberately to avoid becoming too visible to bureaucrats. In the case of the United States, these include reducing the cost to employers of providing good jobs through curbing the growth in health care costs and encouraging investments in dynamic and high productivity industries like green energy.

[1] Assaad, R., C. Binzel and M. Gadallah. 2010. “Transitions to Employment & Marriage among Young Men in Egypt.” Middle East Development Journal 2(1) (forthcoming).

Authors

Ragui Assaad
Samantha Constant