Tunisia’s Labor Troubles Block Its Path to Reform

(Bloomberg Opinion) -- Tunisia’s politicians and political activists tiptoe around the country’s largest labor union. Not only does the Tunisian General Labor Union, better known by its French acronym UGTT, have the power to bring the country to a halt, as it did most recently on January 17, demanding higher salaries for civil servants. It also commands enormous respect among ordinary Tunisians, as a protector of the freedoms they won in the Arab Spring. UGTT, with three other civil-society organizations, won the Nobel Peace Prize for its role in managing the transition from dictatorship to democracy after the revolution of 2011.

The union takes great pride in its role, first as an anti-colonial force before Tunisia’s 1956 independence from the French, and thereafter as a check on government power. “UGTT is different from any union in the world,” says Mohamed Ali Boughdiri, its secretary general. “We fight not just for bread and clothing, but for national dignity.”

That explains why, in a week’s worth of interviews in Tunis, with people across the political spectrum, I heard only the mildest criticisms—quickly accompanied by caveats—of the union. And this, despite the huge hurdles that the union’s demands pose to badly needed economic reforms.

“Their demands are legitimate, but the state doesn’t have the resources,” a presidential advisor tell me, asking not to be named. “Their demands are legitimate; life has got harder and harder,” says Lina Ben Mhenni, a blogger and activist who was at the forefront of the Arab Spring uprising. “They are only asking to be compensated for inflation… they are responsible people,” says Ridha Belhaj, general coordinator of the Nidaa Tounes party, which won a plurality in the 2014 parliamentary election.

Legitimate? Responsible? The civil-service wage bill has already doubled since 2010, and accounts for more than 40 percent of the budget, possibly the largest proportion in the world. Boughdiri argues that inflation has eaten up any gains from the previous pay hikes, and the union claims the government could easily absorb the estimated $700 million cost of salary increases by cracking down on the large underground—and untaxed—economy. Economists are skeptical that this would suffice, even if it were possible.

It is true that inflation has greatly reduced real purchasing power, but the union’s demands are complicating the government’s attempts to bring prices under control. UGTT also stands in the way of privatizing an economy where the state makes or sells—with characteristic public-sector inefficiency—everything from cement to tobacco.

The next nationwide strikes are scheduled for February 20 and 21. Since UGTT represents 670,000 public servants, a large chunk of the working population in a country of 11.5 million people, the strikes will likely succeed in shutting down the country again. That’s assuming the government doesn’t cave before then, mindful of the general election scheduled for October. After all, 670,000 members, plus their families, make up a sizable vote bank. “They have the real power in Tunisia, and they will get what they want,” says Hachemi Alaya, an economist and founder of Tema, a Tunis think tank.

The question that politicians worry about is what UGTT will want next. There’s a general expectation that the union will make a play for direct political power in the parliamentary election. It could form a political party of its own, following the example of another labor union that midwifed a democratic transition: Poland’s Solidarity. Or it could throw its support behind an existing party, taking a leaf from the Congress of South African Trade Unions, or COSATU, which is allied to the African National Congress. A third option is to endorse a list of nominally independent candidates made up of union members and sympatico politicians.

If UGTT does enter the political fray, it should consider Solidarity and COSATU as cautionary tales. The Polish union faded quickly as a political force, despite the prestige of its leader, Lech Walesa, who served as the first post-communism president. The South African union’s participation in electoral politics may be indirect, but it too has lost much of its influence. The alliance with the ANC is at a breaking point, and membership has fallen steeply. 

Boughdiri says UGTT has not yet decided which way it will go, but acknowledges that it will not remain neutral, as it did in 2014. “We are going to be more interested in the election,” he says.

Some politicians, fed up with UGTT’s exercise of power, would be happy for the union leaders to have some responsibility to go with it. “The best scenario is if they form a political party,” says Yassine Brahim, leader of the Afek Tounes party. “Come to the land of politics, and defend your ideology; if Tunisians like it, then you get to run the government.”

Others are already courting the union for an alliance. Nidaa Tounes, which has lost control of the government despite winning a plurality in 2014, is reportedly pitching the idea of a secular “national front” with UGTT to hold off the Islamist Ennahda Party. “A UGTT-Nidaa Tounes alliance is needed,” says Belhaj. Nidaa Tounes’s leader, President Beji Caid Essebsi, may also need the union’s support if he stands for reelection—the presidential poll is in December.

Whether the union stands alone or endorses another party, it will need a broader platform than just salary increases for civil servants. Boughdiri says its economic agenda will include pro-business policies, but also the protection of state enterprises in “strategic sectors.” These will include electricity (production and distribution), gas, water supply, transportation, cement, olive-oil plantations, phosphate mining, education, and health. “The private sector is only after profits,” he explains. “State-owned companies defend the national interest.”

This would sit awkwardly with any of the mainstream political parties, Islamist or secular, which favor more comprehensive privatization. But Nidaa Tounes, weakened by four years of infighting, may have no choice but to make a deal. “Privatization is an important reform, but needs to be studied and should have buy-in from all actors,” says Belhaj. Ennahda has no expectation of an alliance with UGTT, but is nonetheless careful not to openly antagonize the union. Tunisia’s Islamists, it seems, are also mindful of where they step.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Bobby Ghosh is a columnist and member of the Bloomberg Opinion editorial board. He writes on foreign affairs, with a special focus on the Middle East and the wider Islamic world.

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