January 14 marks two years to the day since the Tunisian uprising of 2011 and on the outside, things are moving in the right direction. Democratic elections, the drafting of a new constitution and new-found freedoms are examples that change has come. But within Tunisia, there is growing skepticism that the demands of the revolution have not been met. For far too many, there are still two Tunisias.
At the heart of this cynicism is the belief that despite the rhetoric, concrete actions have yet to be taken to resolve persistent unemployment, remedy an ailing safety net and improve poor public services. It is clear that a new social contract is needed to meet the needs of a future Tunisia.
So is Tunisia ready for the challenge? Can a country going through political and economic transition rewrite its social contract?
The time is right to tackle the challenge. On this anniversary, the Government, employers and labor unions will sign off an agreement to collectively prepare a package of reforms on labor and social issues. Among the topics under discussion, three reforms could go a long way to demonstrating real change. A new social contract would improve social protection programs, promote the kind of labor flexibility needed to increase job creation, and hold the government accountable for the services it is meant to deliver.
In the area of social protection, some albeit modest work has already begun. In October 2012, the Government signed a new policy to reform social assistance and better target the poor, including piloting a new workfare program, supported by the World Bank. With 60 percent of safety net beneficiaries illiterate and 40 percent under the age of 60 years, there is clearly a need to target spending on improving human capital. The government intends to better target fuel subsidies, which currently benefit mainly the wealthy. As one government official told me, the idea is to shift from handouts to building citizen initiative. The sooner this can be achieved, the more citizens will see a real change.
Labor reforms are also needed. I recently met a cleaner in a hospital outside of Tunis who had worked for over 10 years as a sub-contractor - without a pension, health insurance or maternity benefits for his wife. Fully 50-60 percent of Tunisia's current labor force is informal and does not receive social security benefits today, a concerning situation. Measured “flexicurity” would ensure workers receive social security benefits while working and allow more jobs to be created if employers have greater flexibility to hire and fairly let workers go. This would mean ensuring social security benefits, income support and access to effective job search services after job loss where needed. The pay-off is high.
Finally Tunisia’s social contract would aim to reorient public services to citizens' needs. Today, over 90 percent of public budgets are controlled at the central level. This means that to improve public services in the southern town of Tataouine, over 500 kilometers from Tunis and with dramatically different social needs – almost all changes need to be approved and funded through the capital. Providers are also neither rewarded nor held accountable for good or poor performance. While the government ought to maintain its role in policy and monitoring, more decentralization is needed for schools, hospitals, universities and vocational training centers – similar to quasi-public agencies like the national health insurance and pensions funds, research centers, and university hospitals in Tunisia. Tunisia should soon see the benefits of new reforms adopted in September 2012 to introduce accreditation for improving quality in education and health, supported by the World Bank; this should follow with greater autonomy and provider-payment reforms.
There is no doubt these reforms will be difficult. The critical ingredient will be garnering the trust of citizens and fostering dialogue among all groups. The challenge is clear, but without these reforms, the past might remain the present.
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