Is now the right time for U.S. companies to invest in Tunisia?

Tunisian-Americans lobby homeland to focus on economy

By Nicholas Nehamas

An artist in a white dress, with pieces of cloth written with the wishes and hopes of the audience members, poses as part of the Dream City Tunisia 2012 art festival in Tunis September 26, 2012. The festival in the capital runs from September 26-30. (Reuters/Zoubeir Souissi)

The recent anti-American protests in Tunisia have been a blow to the prospect of a peaceful, stable democracy there, but for Tunisian-Americans that’s no reason to give up hope. In fact, some believe that now is the time for American companies to make a serious investment in Tunisia — if the government gets its act together.

In an interview with Latitude News, Mohamed Malouche, a Tunisian-American who lives in Washington D.C., says he was horrified by the Sept. 14 attacks on the U.S. Embassy in Tunis, as well as the burning of an American school in the same city.

“What happened two weeks ago in Tunisia,” he explains, “is not only embarrassing but also extremely damaging for the reputation of Tunisia in the United States. It is wasting the sympathy that the American public, Congress and the media had towards us.”

Malouche is the president of Tunisian American Young Professionals (TAYP), a non-profit group created two months after the revolution in January 2011. TAYP has 120 members (the Tunisian-American community is estimated to number around 8,000)  and pushes for economic cooperation between Tunisia and the U.S.

In the aftermath of the protests — which were set off by a YouTube trailer for a schlocky, low-budget, anti-Islam film — Malouche says TAYP has had to alter its strategy somewhat.

“In our mind, it doesn’t make sense to pound the same message of ‘invest-in-Tunisia’ right now,” says Malouche. “It has to be about communicating what’s happening. Why is this newly formed democracy going through this very difficult transition period? While we believe we are on our way to a democracy, we also realize we were under a dictatorship for so many years and it’s hard to change that mentality overnight. But we think Tunisia has the ingredients to succeed: good education, a large middle class, an advanced standing for women and cultural proximity to Europe.”

As Tunisia Live, “the first Tunisian news website in English,” reports, TAYP recently sent a letter to the Tunisian government demanding the government track down the perpetrators of the attacks.

Rebels without a cause

Malouche adds that, in his mind, the film was merely a “pretext” for the violent protests by a small group of Salafi extremists. But the government, run by the moderate Islamist party Ennahda, is afraid to crack down on the hard-liners, he says.

That’s not the only responsibility the government seems to be abdicating. Malouche says that while the economic situation in Tunisia isn’t “completely catastrophic,” the new government hasn’t done enough to fix high unemployment, which currently hovers at 20 percent. Unemployment was one of the major causes of the revolution against dictator Zine El Abidine Ben Ali.

In Tunis, protestors demonstrate against attempts to arrest the Salafist leader Saif-Allah Benahssine over clashes at the U.S. Embassy. (Reuters)

“The government hasn’t made economic matters a priority,” Malouche argues. “I know this is an interim government and the country is trying to build a new constitution, but there are projects they can do to manage the expectations of the people. You have to show them through visible actions that things are being done: infrastructure projects, you name it. But it doesn’t seem like any of these things are happening. There hasn’t even been a minister of finance for two months.”

If the government can ensure security — a task much less daunting than in neighboring Libya where armed militias and tribal rivalries rule — and accomplish financial regulatory reform, Malouche believes American companies will find lucrative opportunities to invest in Tunisia.

Tunisia, Malouche explains, has no natural resources. Instead, it’s tried to position itself as a knowledge-based economy, training scores of scientists and engineers.

“Instead of saying [to foreign companies] ‘come for manufacture or textile,'” he says, “we focus on information technology. We see it as an enabler toward better education, better governance, better transparency, better economic opportunities and a better future.”

Malouche counts 77 American companies that have already invested in Tunisia, including giants like Microsoft, Hewlett-Packard and IBM. There are also a number of smaller outfits like the tech firm SunGard and the airplane part maker Eurocast.

Ultimately, Malouche explains, he and other young Tunisian-Americans want to offer the U.S. “a message of hope and realism” about their homeland. “The overwhelming majority of Tunisians are progressive. They want progress. And the negative forces [in the country] exist in all nations. They are small, they are isolated. But Tunisia’s not going to be able to move forward if the basic rule of law is not enforced.”