>> From the Library of
Congress in Washington D.C.
>> Mary-Jane Deeb: Good
afternoon everybody.
And welcome, welcome to the,
to our reading room the African
and Middle Eastern Reading Room.
I'm Mary-Jane Deeb,
Chief of the Division
and I'm delighted you
could be here with us.
And for this special talk
with Professor Stephen King,
at Georgetown University.
Before I start we have, we
want to point out to you
that this program is taking place
in the context of the Library
of Congress's collection;
so it is part,
in a way part of the collection.
It's going to become part of
the archives of the collections.
And all our programs
in this division,
other divisions are complement
the collections that we hold.
So, this division is responsible
for 78 countries around the world,
in Africa, the Middle East,
Southern Asia and the caucus's.
And we collect, we recommend,
we collect, we store collections
which come to us from our offices
in Cairo in Nairobi, in Islamabad.
Those three offices
actually send us materials.
They purchase the materials,
they catalog those materials
and they send them to us and
we keep them in the stacks,
closed stacks right here and
then we show them to researchers.
This is one part of our activities.
The other part of course, is to
because we are the public face
of the Library, is to
interact with the researchers
and the patrons, to serve them.
We are public servants,
so we serve them.
The collections, we're
experts in our fields
and this division has 21 experts.
And we know the languages, the
cultures, the sources that we have.
And we invite experts who are
outside of this institution to come
and to share with us their
research work, their thoughts
on the new trends in the fields of
African and Middle Eastern studies.
We are in a way, a focus of
interaction between patrons
and between those who
serve the collections.
We are also, we show films.
We have displays and exhibits
and we invite scholars
to bring their students if they
can, to the library as well.
We've moved from up
to the 18 year old,
we're going down to
15 and 16 year old.
Younger than that, they should
be accompanied by their parents.
But, anyway I want to put today's
lecture in quick focus in terms
of the Library's collection
on Tunisia.
Some of you have already seen them.
Now this doesn't work
quite that way.
I was hoping it would, but anyway.
Okay. So this is the
room where you're in.
This is where we serve
you with the collections.
We have reference sources
for the journalists.
We also have works on archaeology.
We have ancient manuscripts, we
have old maps, those are found
in various parts of the library.
We have prints and
photographs on Tunisia,
which includes the ones
you've seen and these.
We have collections
of vintage posters.
We have travel books on
Tunisia, World War II maps,
we have a veterans project
that includes veterans speaking
about their times in Tunisia.
We have papers such as
the Roosevelt papers,
manuscripts in the
manuscript division.
Here is Stephen Kings
book and members
of others who are there as well.
We have newspapers and journals.
We have a website of archives taken
from Tunisia at the when it was,
during the Industrial Revolution;
so these are very specialized,
we have vigils.
The law library has
materials as well on laws.
We have literary works, language
dictionaries and materials
on linguistics, arts and
crafts, even cook books.
And definitely we have programs such
as this one and this is an example
of a program that took
place on Tunisia.
Now, we also partner with
associations that work
on the countries and
regions of our interest.
And today's program is co-sponsored.
We work together with the
American Tunisian Association.
And many people today in the --
in this room are members of the
American Tunisian Association.
I'm saying this because
we're being webcast.
And the webcast appeared
on the libraries webpage,
eventually, it takes a little time.
We move slowly but surely.
But eventually you will be
able to see this program,
and this program can be seen
in every part of the world.
And we realized through
our social media
that other people actually do watch
our programs, and do check in.
Angie Hall who is in our division
has put together a Facebook page
as well as organized blogs.
Not only for this division,
but for all the areas studies.
And I know she has distributed
some forms to you, so we'd be happy
if you like us on Facebook
and on the blogs,
if you subscribe to it, it's free.
Just click and subscribe.
And if you become our friend because
if you do then you'll be aware
of all the programs that
we're getting because part
of the things we put up is
a calendar of our events.
And the calendar of our events is an
open invitation for you all to come
and attend our many programs.
So again, thank you for
coming and now I would
like to introduce our speaker today.
After this long introduction
of mine, but anyway,
Stephen King is Associate Professor
of politics in the Department
of Government at Georgetown
University.
He received a BA with
honors in English and an MA
in African Politics from
the University of Florida.
And he received an MA in
Politics in Near Eastern Studies
from Princeton University where he
also got his Doctorate in Politics.
Professor King is a comparativist
who has focus in his work
on the Middle East and North Africa.
He is the Author of
Liberalization Against Democracy:
The Local Politics of Economic
Reform in Tunisia published
by Indiana University Press in 2003.
And the New Authoritarianism in
the Middle East and North Africa,
also published by Indiana
University Press in 2010.
He teaches Comparative Politics,
the politics of North Africa,
Authoritarianism and comparative
perspective, the Middle East
in Comparative Perspective, and
politics of the Third World.
After obtaining his PhD in
Politics from Princeton he taught
at the university level
in various institutions
and including Georgetown
University before he became
associate professor.
He also taught in Morocco, completed
a full grad stint in Tunisia,
was a visiting scholar
at Woodrow Wilson center
for international center
for scholars.
And in addition to his
two books mentioned above,
he has written numerous articles
and book chapters on development
in the Middle East and North Africa.
His theoretical concerns,
the theoretical concerns
of his research, the
focus on the links
between economic liberalization
and political change.
And he has challenged many of
the assumptions that we hold.
So, without any further ado let
me introduce Professor King.
[ Applause ]
>> Stephen J. King: Well thank you
Mary-Jane for inviting me and happy
to see the audience here and the
broader world on this web case.
Mary-Jane can you remind me
on the final title we
decided on for this topic?
>> Mary-Jane Deeb: It
was the challenge --
>> Stephen J. King: Well
the economic transition
that Tunisia, sorry.
[ Inaudible ]
>> Stephen J. King:
The economic transition
that Tunisia's democratic
transition deserves.
As you can tell from the
introduction I'm interested
in Tunisia and I've
spent some time there.
Now my general research
interests in layman's terms is
that I'm interested in the politics
of the switch from Arab Socialism
or from Socialism to Capitalism.
And by politics I mean in the way
that Harold Ashwell defined it.
Who gets what, when and how?
And the switch from Arab
Socialism to Capitalism
within the literature
is usually grouped
under the political
economy of development.
And largely begins with the
economic development strategies
of these countries.
And coming to most of the
developing world, they're world,
Tunisia included made a
transition from Arab Socialism,
which meant the practice stayed
on enterprises, land reform,
a new social contract
to provide basic food
and fuel and housing, education.
The new social contract after
independence for development.
The second strategy is the
strategy that's been implemented
over the last two to three decades.
It's usually called the
Washington Consensus.
And clearly it's a switch
to policies that are based
on market reforms, market
forces, privatization,
capitalism broadly said and
this Washington Consensus set
of policies have been advocated
by the World Bank and IMF for,
since about the 80's I suppose.
And connected to the loans that they
provide developing countries there
are these recommendations
to implement those
Washington Consensus.
The Washington Consensus,
it has 10 policies.
And I won't talk about them all,
but the advice is in two areas.
One is in stabilization of the
economy and for stabilization
of the economy they advise that
countries slow down inflation
through fiscal discipline
and improving the financial
position of the state.
Now the one policy I want
to focus on is budget cuts
to improve the financial
position of the state.
Arab Socialism or that phase
of the development strategies
included outlays by the state to pay
for the subsidies and fuel
and education and so forth.
So the advice is to cut those in --
>> Stephen J. King: And
engage in fiscal discipline.
People talk about austerity
policies,
recessionary, austerity policies.
And when our countries began
doing these there was a reaction
in the countries, the cuts in
subsidies were politically explosive
or bread riots across the region.
I can't remember what year
they occurred in Tunisia.
But they occurred in Morocco,
Tunisia, across North Africa
and much of the Arab world, these
riots against the subsidy cuts.
The other group of
policies are under the label
of structural adjustment.
And the ones I want to focus on
are free trade, free in prices,
privatization of state
on enterprises in land.
Okay. And I want to highlight under
privatization, as privatization
of state on enterprises and
also privatization of land.
In the World Bank and IMF argue
that the privatization should
benefit small land holders,
land owners.
And why do they say that?
There's a belief that
small farm size,
family owned farms especially
they limit the supervision costs
of managing wage, labor and
the -- and enforcing effort.
You can get more effort.
You don't have to supervise
your family that work hard.
And generally the small farms
tend to be the most productive.
Large land owners can be
absentee or prestige land owners
and not use the land productively.
There's a danger of over
production in large farms
and within the Washington Consensus
this privatization of land,
this land reform is usually
suggested as a counter to the charge
that structural adjustment, that
the Washington Consensus helped,
hurts the poor.
They argued that.
The poor will be helped
with the land privatization
to the small family farms.
So, going to Tunisia and Tebourba;
I'm interested in these issues
because of this switch to
the Washington Consensus
and the politics of that switch.
And Tunisia gave me an opportunity
to do research about this
and I decided that
there's less research
on the local level,
on land privatization.
And I won't stay in the capital.
I want to look at state
on enterprises.
I'll look at the local level and so
I found a research site Tebourba,
those of you know Tunisia.
And the timing was the 1990's when
the end stages of Arab Socialism
in Tunisia were coming about.
They were privatizing the
agricultural cooperatives put
in place by Ben Salah.
So, I got a chance to be there
on the ground while
they were doing that.
So, I was there for a year and they
were going through this process
and so, to research the
politics as who gets what, when,
where and how I mean the Washington
Consensus, the expectation is
that well, family farms, small land
owners, the poor will benefit --
the society will benefit
because there will be greater
productivity and efficiency.
Farming will be -- as we move
into a more market economy resources
will be allocated more efficiently,
taking the state out of the
economy, will stop corruption
and all of these benefits.
So I go and their privatizing
these farms and I went to four
or five villages around there.
And the first step when
I got there was okay,
I needed to know land
tenure as it stands now
and what the plans are
for this privatization.
So, I go to the local
officials there and I ask
if I can see land tenure
information, who owns what.
That one question ended my research.
>> The delegate said "Tomorrow
you go see the governor".
And they revoked --
I was on a Fulbright
and they revoked my
research clearance.
So, I went back to
Tunis and it was --
it took about six weeks
to get it back.
And we got it back
because someone within the,
I think because someone working
for Fulbright, a Tunisian working
for Fulbright used his connections
to get my research clearance back.
Okay, so I go and I
know that people worried
about when the authorities
were worried
about land tenure information.
And I eventually got
it in various ways.
I think the biggest was on some
wall in a local official's office
and he stepped out and I was writing
everything down as much as I could.
But anyway gradually I got an idea
and the overall story was
the land reform was upward.
It went to large land owners.
It went to the best connected
local people politically.
And so I designed the research --
I made a research design
where I would interview people
from different large land owners,
small, medium, local officials;
I was interviewing
everyone about these issues.
And I'd like to read a few of the
passages from these interviews
with these different
economic categories
in Tebourba while they were
undergoing land reform.
>> Okay this was a poor peasant.
"The workers have become beggars.
The sun shines on everyone.
Normally the state
looks after us all.
Why give the land to the rich?
They already have land.
If you give them more, they will
no longer think of the poor.
What are they going to do with more?
Buy another car.
It's no good.
You find people with 1,000 1,000
hick cars while others won't even
have one hick car.
The poor one at land, some
farmers before got land
and they're doing well.
But if you have connections that's
the only way you can get land.
Those who are fired like me, we
go to the administration asking
for work and tell them "You
fired us, so give me something
to buy bread", nothing happens".
Another one.
"The poor will always
stay poor around here.
The poor like rain and
grass for the animals.
The rich one allowed them to graze
on their land, before you could.
Now you can't".
"If there's assistance from the
state, [Inaudible] will give 50%
of it to the people
and the rest he'll keep
for himself and his friends".
It goes on like this in
addition to the anger
at how the land was privatized.
There was anger about
the state pulling out in
about land owners no
longer contributing as much
as they did before
to a moral economy.
They're giving the land and the
moral economy in that area was
about -- for the poorest
getting enough resources to last
through the year, and part of
the way they got it was the gifts
of the rich during Islamic
holidays in that harvest time.
And that was part of how
they managed their budget.
So there was some pressure trying
to encourage them to do it,
criticizing them for not doing it.
And the wealthy that I talked
to said "Yeah, now we don't do
that anymore", we're
a modern society.
The state does that; we
don't have to do that.
So there was that tension of should
they help the poor in this time
when they're getting great
benefits from the state.
And through my interviews
with the wealthier
and with the government
people I got the impression
that the state was pushing
these land owners to do more,
give more in terms of this, at the
Islamic holidays during harvest
and it was like an offset for,
okay we give you this land,
now you have to do this.
And that's how they
privatized the land
from the Ben Salah cooperatives.
So what did I take from that?
I took a few things; obviously
the land reform was upwards.
That meant crucially that
what's behind the banner
of they switched the capitalism
and market forces and privatization
and the Washington
consensuses different.
What's behind that banner?
What's behind that banner was
the powerful taking advantage
of privatization.
Behind that banner somewhat pushing
producers toward an old moral
economy instead of the rational
act or productive people
that the policies are supposed to
trigger, it's supposed to support.
Okay, So that was my dissertation
and first book went
along those lines.
Later when I did research,
the research area was
about regime change.
And literature this is you
know 10 years ago I suppose
when I started this.
The big debate, this
is pre-Arab Spring,
was about Authoritarian persistence,
and for regional scholars.
I was looking at that
and we were trying
to explain why this persistence
of authoritarianism in our region,
what can be done to
democratize the region?
Research along those lines and my
thought was this, it doesn't look
like we're moving towards
democratization,
but there's a lot of change.
Remembering what happened
in Tunisia, in Tebourba.
I was thinking there are great
changes in economic policies,
asset distribution, and that's
within authoritarianism.
So I, my next research was about
change within authoritarianism.
And so analytical framework
developed was to look at change,
in regime change by
looking at four areas.
One or what are the policies?
And the policies again, are
privatization, free trade,
land reform -- - right,
land reform upward.
What are the basic policies?
What's the ruling coalition?
What are the political
institutional changes?
And what are the changes
in terms of legitimacy?
And so basically if we're going
from the Aram Socialism paradigm
to this Capitalist
paradigm the new policies
or the Washington consensus
politics, we talked about that one.
The ruling coalition at
the local level I figured
out were large land owners.
At the national level and
what stayed on enterprise,
I figured out doing the
research that it was the same.
The assets were going to
the wealthiest and the best
and politically connected, they
became the new ruling coalition,
Arab socialism is more
of a populist coalition.
This has become a ruling coalition
for a favoring the wealthy.
Institutional change, a facade of
multi-party politics went along
with this switch to capitalism.
And finally with legitimacy you get
some legitimacy from fake elections
and the other piece is how
much repression is necessary
to make this regime
change in these four areas?
And so in that research I found
a similar thing as I found
in Tebourba, the most powerful --
getting great advantages
from that change.
They were taking these
advantages and they were aided
by a Washington consensus
set of policies
that said the economy will
grow; you'll end corruption,
all of these benefits
for this switch.
>> Is that what I found?
No. What I found was more
of a Crony Capitalist form
of authoritarian rule
is what emerged.
And you know it's on the
ground, what did you see?
We saw ruling -- a small ruling
click and patronage networks
that were dominating the economy.
They use security institutions
in the police and the judiciary
to maintain power within
that, this small ruling click.
And now that's what the young
Tunisia looked basically
at the Arab Republics Tunisia,
Egypt, Algeria and Syria.
And there's an economist
who worked --
the Arab Human Development
reports that were a group
of Arab Economists working on that.
And I got to know Nader Fergani and
he was the head of that I believe.
And I talked to him about it, what
was going on in Tunisia and he said,
"The same thing in Egypt".
And this is the crux of
our conversation about it.
>> "Egypt's privatization
and structural adjustment
programs have led
to a brand of chronic capitalism.
The operative factors are
very sinister cohabitation
of power and capital.
The structural adjustment program
is helping to reconstruct a kind
of society where a small number
of people, where a small number
of people on the line
share of assets.
Privatization in effect has meant
replacing the government monopolies
with private monopoly.
The Middle Class has been shrinking
while there's an enlargement
of the super-rich.
State owned enterprises have been
sold to a minority of rich people.
The record of private sector
enterprises creating jobs is
very poor.
We are not reaping the benefits
of an energetic bourgeoisie.
What we have is a parasitical
comprador class.
The consequences will be
no less than catastrophic.
This society is a candidate
for difficult period
of intense violent social
conflict and the kind
of government we have will not do.
A conversation took
place around 2009,
2010 just before the Arab Spring.
Okay so moving ahead
to the Arab Spring
and we know Tunisia has made
wonderful progress in its transition
to democracy, with some
remaining challenges.
But by far the best example
and a lot of great progress.
Part of what the Arab Spring
was about not just democracy
and human rights, dignity
and socioeconomic justice
and so the research
I'm working on now;
part of it is about the
economic transition.
The economic transitions
that are going along
with these transitions
to or towards democracy.
And I did some research and
finally I found the vein of research
from economists who know the region.
And they were talking a lot
about it's not just a
democratic transition;
it's an economic transition as well.
And what would be the best economic
transition for the Arab World.
And -- instead of the
Washington Consensus,
this is their version
of what's necessary.
There are really five economic
transitions that need to take place.
One you need a developmental
state that is capable
of implementing an
industrial policy, okay?
It's improving the capacities of
the state and giving it a role also
in fostering industrialization Two,
a productive private
sector wean off corruption.
Three, a vigorous social
policy focused on the young.
Four, improved economic
relationships with the IFI's,
the region and the world.
Five inclusive socioeconomic
policy making.
Okay? And their reaction
in general was this.
After the Arab Spring
and recognizing the socioeconomic
causes of the Arab Spring.
And we have to recall that
Tunisia at the time was portrayed
as the model for the Washington
Consensus having the best results.
In -- and we found out after
the Arab Spring that some
of the results warrant --
some of the data, information
wasn't sound about Tunisia.
It was probably more poverty
than they were reporting.
An employment was probably higher,
regional inequality was
great, those kinds of things.
So this group of economists argued
that economic reform strategy
that Tunisia deserves takes
advantage of the opportunities
for economic growth provided
by the global market,
provided by global markets
in a vigorous private sector
while avoiding the simple minded
application of market
liberalization, privatization
and a minimal state that led
to crony capitalist forms
of authoritarian rule.
Okay?
>> Now since it's been what,
six years since the revolution?
And how has Tunisia done in
regards to these five areas?
Well I mean the developmental state,
increasing capacity,
a work in progress.
The productive private
sector wean of corruption.
There are a lot of complaints that
the private sector is still corrupt.
And there's been a loss of
momentum even about trying
to get back the money that
was stolen during that period.
And by the way we have some
idea of who stole it in Tunisia.
And a lot of it as you know, it's
the extended family of Ben Ali.
And the World Bank even had
this accounting of corruption.
By the end of 2010 some 220
firms connected to Ben Ali
and his extended family were
capturing an astounding 21%
of all private sector
profits annually in Tunisia.
A small group of 114 people.
Okay, so the efforts to recoup that
money from Ben Ali and his family
and the cronies related to
them has stalled and as far
as I can tell a lot of this is
a work in progress obviously.
As I think [Inaudible] in this
government has suggest that we need
to reconcile without continuing to
seek that money; we need to move
on with our private
sector to an extent.
I spend most of my days teaching, so
I'm keeping day to day up on this --
it doesn't happen,
but in the last year
or so these things are coming out.
On the vigorous social
policy focused on the young,
yes that's occurring
and a lot of the money,
the aid money that's going
to Tunisia is probably going
to various projects, social
policy, helping with job training
or various programs to help
the young, that's occurring.
The institutional development
of inclusive socioeconomic
policymaking.
Social dialog impacts -- that's
important because what would it do?
It would provide an opportunity
to obtain a more humane,
collaborative and just capitalism.
It would also help the
rationality of economic policy
because in those dialogues
what can happen is that workers
and business employers
in the government can have the
conversation about expectations.
What can be done without ruining the
economy and so that you collaborate
on the challenges, you
give the people who need it
and who participate in
the revolution to get it.
Some concrete advances without
them being overwhelming, all right?
If you don't do it, what you end
up getting is economic policy.
It can be sabotaged by
strikes going back and forth.
Strikes, money is paid out.
This is what was happening
in Tunisia for a while.
There was one example,
one town some people;
I can't remember what
industry they were in.
They were striking and the
government answered their demands
and then all the towns around
asked for the same thing.
So, that was not working.
So, having a national
dialogue about this
to move towards a socioeconomic
pact seems important.
Tunisia in 2012 or I think
2012/2013 they've had a history
of national dialogues and
social packs that try Apartheid
under Ben Ali with labor,
Utica the economic association
and the government.
And they agreed to form
committees I believe.
It was something sort of basic,
basic to explore this in 2012/2013.
Then the instability, insecurity
the assassinations happen in the --
and it went to the back burner.
After the quartet does the national
dialogue that resolves that impasse
and gets the Constitution
through and the success of that,
the Nobel Prize and so forth led
by the National Labor Federation.
People were talking; well maybe
we should do something concretely
in the economic realm,
that's just what we need.
And then the last year or so
this has been not he docket 2016,
I think the -- I think they had it,
but we don't know the results yet.
It's been -- it hasn't
gone on long enough.
But they did meet and I
think it was on the rubric
of an employment dialogue,
something more limited.
But then it also was different in
that political parties participated
in civil society but --
so that's happening now.
The last piece of advice
for the economy
that Tunisia deserves
is back to the IFI's,
the International Financial
Institutions.
They need a better relationship
with Tunisia and you can tell
from what I've been discussing
what's happening in practice
on the ground is different from
the Washington Consensus that IMF
and the World Bank
are putting on paper.
So the change in relationship
we also start --
needs to also happen with
IMF and the World Bank.
They have to recognize
elite capture;
they have to involve civil society
so that the policies aren't hijacked
to the benefit of a small
number, those kinds of things.
Is that happening?
It isn't. The 2016 was also
an IMF agreement for a loan
that went exactly back to the
Washington Consensus, austerity,
no real social policy and the
simple application of privatization
and free trade and so forth.
So that was happening again
and got a bad reaction,
the [Inaudible] threatened
to have a national strike.
And there are some debate
"Well maybe we should instead
of unilaterally putting these
policies in, we should open it up,
collaboratively and democratically".
So, at least they're
discussing that and its --
and that's where I think we are.
Thank you.
[ Applause ]
>> Mary-Jane Deeb: Thank
you, thank you very much.
And now the floor is open
for questions and I'm going
to take the first one and then I --
I wanted to ask you
about the process.
In the first stage it was changes
in the agricultural land ownership.
In the second stage
it was austerity,
more and Washington
Consensus, those measures.
So, in the third stage
is the emphasis
on creating new industries
as you pointed out?
And is there a market
for those products?
>> Stephen J. King: The -- the
World Bank and IMF don't seem
to be convinced that an
industrial policy is necessary.
It still doesn't seem to
be part of the program;
so we're getting the same thing,
which by the way ended
up de-industrializing.
What the open up too soon
or without production
and de-industrialized industries
in Tunisia and various places.
And they're saying the same
thing, they're repeating,
there's no specific
industrial policy.
And the second part of
your question was --
>> Mary-Jane Deeb: Would
there be a market for --
[ Inaudible ]
>> Stephen J. King: Well I mean to
take advantage of the opportunities
in global capitalism, they need
you know, efficient products.
If they're competitive, they
are; if they're not, they're not.
>> Mary-Jane Deeb: I think
in their area they could be.
>> Stephen J. King: That, I
mean I think an economist would,
who knows -- I'm more
interested in the politics of it.
I don't know the exact
details of which companies
that they should emphasize
and where they are on that.
I mean they had a manufacturing
base and regionally they were known
for progress in that direction.
But, I don't know off
hand the details of that.
Yeah.
[ Inaudible ]
>> What is Tunisia's
comparative trade?
[ Inaudible ]
>> They have this free
trade agreement with Europe
and the EU had it for some time.
What has been the impact
of that and does this work
with consensus structure,
does it work in a more
liberalization direction
of [Inaudible]?
>> Stephen J. King: Yeah the --
when Tunisia was getting the high
marks prior to the Arab Spring,
I mean the reports
were it was working.
I mean, in olive oil
and agricultural products
were the main things.
There was one paper on olive
oil led growth for Tunisia.
And so I mean the World Bank,
they were getting 46 percentage
growth rates during that five,
six year period prior to the
Arab Spring, which is good.
So you know the numbers
weren't all wrong.
And -- but moving from that,
that's a comparative --
I mean the part about comparative
advantage, the East Asian examples
where the most progress
has happened.
We talked about their products --
their products became competitive
in about a generation,
South Korea under park.
So --
[ Inaudible ]
>> Stephen J. King: I mean
they had a development strategy
that the World Bank
and IMF don't consider,
the East Asian Development
Strategies.
It's a different one.
They've done the best, so it should
be on the agenda as consideration,
but that isn't -- because of the
East Asian model they have an
industrial policy.
They have protectionism in order
for these industries
to get on their feet.
But they have a bureaucracy
that's different.
I mean there would have
to be great progress
in improving the bureaucracies
in Tunisia;
so that they can play the kind
of role in industrial policy
that they play in East Asia.
But I mean the point is, Bill's
question is evidence seems
to suggest a need for a
dynamic comparative advantage.
And that doesn't seem to be
part of IMF and the World Bank.
That you start with this
olive oil like growth,
but eventually you need
to get to manufacturing.
And you need a bigger role
for the state in getting there
than they've been willing
to consider.
>> It's an interesting
anomaly, I mean --
[ Inaudible ]
>> Tunisia moved from a
government led oligarchy
to a privately led oligarchy
over time; still an oligarchy.
And when of the recommendations
is the break down,
business classes [Inaudible].
[Inaudible] Which leaves the IMF to
suggest that the way to do that is
to liberalize [Inaudible] to get
rid of the banking and customs
and all the internal regulatory
system which favors the [Inaudible].
You get rid of it, to
literalize it entirely.
They can't get that
through [Inaudible].
They absolutely cannot.
So how do you break down
the Middle Class oligarchy,
Upper Middle Class oligarchy if
you will that's totally dependent
on government subsidies
who experience regulations
on [Inaudible].
>> Stephen J. King: It's modified
strategies, strategy of this group
of economists do talk about
that, about deregulation
and making a business
environment better for all,
that's one of their open
thrall, better and open.
It's -- that's one of their
recommendations that is to do that.
How do you get it done?
I mean there are best
practices and they refer
to involving the private
sector, I'm thinking now more
about the corruption part of it.
The -- and no impunity
for corruption.
If you prosecute the
people who have done it,
deal with the safe havens
abroad, where the money is stored,
the World Bank and IMF using
their leverage to take steps
that will prevent elite capture.
It's a work in progress, that's
the directions that they outline.
>> I guess what I'm saying
is production goes further
than just plan stealing; it goes
to the rigging the economic system,
regulatory system [Inaudible],
that's one.
>> Stephen J. King: Yeah.
No, they say deregulate.
I mean that's what the
advice is to deregulate.
Deregulation is a part of this
modified economic reform strategy.
[ Inaudible ]
>> Stephan J. King: No, I
accept the, I accept and I defer
to the economists that the best we
can do is this modified economic --
this modified market reform strategy
that doesn't have [Inaudible]
privatization,
trade and other policies of
the Washington Consensus.
And so it still, it's not --
their strategy is for capitalism
that is more compassionate,
that works for more
as a shared growth
kind of capitalism.
It's an inclusive Democratic
change to capitalism.
And it's dynamic look at
capitalism where you change
from what you're doing within the
capitalist economy now to something
that gets more benefits over time.
But it's still within --
it's still capitalist.
Yeah.
[ Inaudible ]
>> Deregulation, privatization,
so-called free trade
which is a misnomer [Inaudible]
trade agreements there are some
areas that are [Inaudible]
protection aspects
in terms of [Inaudible].
A prime example is prescription
drugs and patent extensions
and copyright extensions and
the monopolies over those.
[Inaudible] so it's not free
trade, its managed trade
and the way that's been
applied with [Inaudible] is
that they be international
[Inaudible]
and then local economy [Inaudible]
with that kind of dynamic.
So, what's happening with
deregulation is that businesses --
some businesses are
[Inaudible], others aren't.
[ Inaudible ]
>> Those are being
dismantled under deregulation.
Privatization has led
also to the benefit
of certain private [Inaudible], and
that's within the power structure.
So my question is whose
got the power?
How do you present Middle
Class, Working Class.
[Inaudible] The Middle Class
[Inaudible] how do you build
them up?
How do you change the power
structure, build an economy
that benefits the mass of people
and not just this global financial
system and then [Inaudible].
That's a question for
[Inaudible] too.
>> Stephen J. King: Yes.
>> The policies in the US
[Inaudible] deregulation [Inaudible]
with aiding and becoming
[Inaudible].
>> Stephen J. King: In terms of --
>> How do you deal with that in
terms of power, economic policy?
>> Stephen J. King: Yeah
I mean they usually,
the National Labor Federation
was powerful in Tunisia
and the collaborative, the
social dialogue, having the pack,
getting people to make a pack that's
bringing labor, the employers,
government together to address these
-- to have these conversations.
That's -- and to come up
with policies collaboratively
that will help the Middle and
Lower Class, and also you know,
the broader economic issues
that you're talking about.
If we want it to be more shared,
it has to be a more
inclusive policy making.
And Tunisia has scheduled that.
They recognize that.
And they're bringing
people together.
I mean this -- it's just
within the last year
or so that they had the pack and I
haven't had a chance to read fully.
I know that they're
focused on employment
and they were like
11 recommendations.
But that's how accepting
capitalism but also dealing
with changing the power structures.
And some of the economists,
the Tunisian economists
with this socioeconomic pack
dialogue, they're more worried
about labor than they're
worried about business.
Because politically
labor is so strong.
And the labor might have
the power to demand enough
that you don't solve the
broader economic issues.
But --
[ Inaudible ]
>> I was wondering about what
recent stressors there are
on this privatization,
this concentrated [Inaudible]
is there kind of a resistance
to what [Inaudible] are you
getting pressures from migrants,
stressors from external
groups [Inaudible]
and what are these doing to --
[ Inaudible ]
Stephen J. King: The security issues
in external groups that adds --
put socioeconomic dialogue impacts
sort of the -- on the back burner.
It's one of the things that can get
in the way; that's certainly true.
I mean Arab Spring we ended up
not getting the changes of that --
the people, the economists
they were writing.
They were hoping that
you can move to regional,
more regional economic cooperation
because North Africa it looks
like we might get new
Democratic governments.
And you have a chance
but we didn't get that,
Libya is where it is
now in this war.
And so the, the regional piece
seems stalled at this point.
Mm-hmm.
>> Can you talk about this sort
of capitalistic model,
socialistic model.
Just wondering, has anyone tried
to find out [Inaudible] in Tunisia,
[Inaudible] one or the other; or
is it just not on their radars?
>> Stephen J. King: The, I mean,
I think there's a general point
that Islam's tend to
favor capitalism
and free markets, private
enterprises.
There's more hostility, socialism
and the eastern block and atheism
and profit, merchant and
private properties is important.
In the Tunisian context the --
the leftist parties and the
national labor federation are --
they are enemies more or
less, not enemies but they are
in conflict with the Islamists.
And so if anything more
business orientated to an extent.
They've tried to start their own
labor federation, the Islamists
and as reaction to too much power
by the more left leaning
national labor federation.
>> Mary-Jean Dobb: We have to stop
now but I want to thank the speaker
for a wonderful presentation
and to thank you all for coming.
>> This has been a presentation
of the Library of Congress.
Visit us at loc.gov.
