A little over three years ago, a Tunisian street vendor set himself on fire and sparked the Arab Spring. A big part of the revolution had its root in economic instability. This weekend was a milestone for Tunisia. The North African country adopted a new constitution.
The lead-up to the new constitution was characterized by political instability that no doubt hurt the economy. Tourism, which makes up 12 percent of GDP, was especially hard hit. But the adoption of the new constitution could assure foreign investors and tourists that it's safe to come to Tunisia. "This is also going to reassure and give confidence to local companies and the local economy," says Riccardo Fabiana, the lead North Africa analyst with the Eurasia Group. "However", he adds, "this is probably not going to be enough."
One of Tunisia's biggest problems prior to the revolution was corruption and cronyism. The good news is that many of those corrupt officials have been removed from power. "Now these cronies are gone. But the barriers and the regulation are still there and are still somewhat of a structural problem for the private sector," says World Bank economist Jean-Luc Bernasconi. Bernasconi believes the new government will have to create policy reforms to solve these larger structural problems.
But Tunisia's slow economic growth is also the result of weak European economies, something the new government cannot control.