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THURSDAY, NOVEMBER 26, 2009
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Tunisia economy thrives amid restrictive politics

Once a day laborer struggling to make a living, Mourad Baazouzi now wears swanky sports shoes, manages 22 employees, and pays himself a good salary. With hard work and a small loan from a state-controlled bank, he's joined the middle class Tunisian authorities pride themselves on having created.

Human rights groups say the trade-off for this economic and social success is an overbearing state apparatus that stifles liberties and helped hand the country's president, Zine l bidin enAl, fft trminlosiedelcton Sndy.

unsia's economic advance sounds almost too good to be true, in the face of global recession and few natural resources _ a model other autocratic governments have sought but usually fail to achieve.

Baazouzi, who created his small workshop nine years ago, is among the Tunisians who say they vote for Ben Ali.

A welder without a high-school degree, he borrowed from the Tunisian Solidarity Bank, created by the government in 1997 to fund small projects. With his initial 10,000 dinar (about euro5,000) loan, he built a firm that fixes broken trailers for transport companies at a quarter of the price they would be charged in Europe.

His employees are paid about euro250 per month on average, more than the minimum legal wage, and he expects a 500,000 dinar turnover and 40,000 dinar profit this year. "I'm reinvesting all of it to expand the company," Baazouzi said, touring the large and noisy new warehouse he's built in Rades, a busy industrial town next to the salt lakes that harbor Tunis' trading port.

The Solidarity Bank, or BTS, was created to tackle Tunisia's biggest ongoing challenge: unemployment, which remains at 14 percent according to official figures and that Ben Ali has vowed to reduce during his new mandate.

Though the more than 7 million tourists pouring each year onto Tunisia's sunny beaches bring in 5 percent of GDP, small industries like Baazouzi's make up over 20 percent of the economy. Services, including high-tech and Internet firms and a booming outsourcing trade with France and other countries, make up more than alf.

Eonmitssa i hs oredinTuisa ecus fr he pat generation the government has invested in education and skills, diversified the small country's economy beyond tourism and carefully managed its finances.

Tunisian authorities say their economic achievements are the best path to good governance as a whole. They point to the relative peace, social equality and prosperity of Tunisia compared to its neighbors in North Africa or much of the broader Arab and Muslim world.

The capital Tunis remains safe and tidy by standards of the rest of the region, the white facades of its buildings _ a mix of old Arab style and art deco influence from its former French colonial rulers _ blinding in the brilliant Mediterranean sunshine. The country is relatively secular and less than a quarter of women on the city's streets wear a veil.

"You can't drive real economic liberalism without also gradually liberalizing politics," said Abdelhamid Triki, the junior minister for international cooperation and foreign investment. "We've been going very fast on the first aspect, and we're catching up on the second," he said.

Triki and other officials say elections have grown increasingly free in the 22 years since Ben Ali, now 73, took power in a bloodless coup. Ahead of Sunday's election, opposition candidates were allowed to hold gatherings in the capital, plaster posters on allotted spots, and go on national television for one hour each.

But Ben Ali still won an overwhelming 89.6 percent of votes. And he reminded critics of the limits of their freedom by going on TV to threaten legal retaliation agaistanon wo uetinsth letins fires.

Wil observers acknowledge Tunisia's economic successes, rights groups say Tunisian authorities sometimes criminalize dissent. Amnesty International says, for instance, that two protesters were killed by police during social unrest in the impoverished southern Gafsa region last year, and that labor activists who led the movement are still behind bars.

Triki says Ben Ali has the people's support because "he delivers." He noted Tunisia's 6 percent average yearly gross domestic product growth over the past two decades, and the 3 percent predicted this year by the government and the World Bank.

Government figures also show a poverty rate below 4 percent of the population _ the World Bank thinks it might be a bit higher, but says it's still the lowest in the Middle East and North Africa region. There is also a free health care, life expectancy above 74 years, free schooling that has achieved brought high literacy rates and helped a third of Tunisian youths to university _ where 60 pecent of the students are women.

"Careful macroeconomics management is a major asset" for Tunisia, the World Bank's chief economist for the country, Diame Diop, said in an email. He cited low budget deficits, the near balance of imports and exports and a diversified economy as strong points.

Authorities also say they've massively reduced social inequalities that plague countries in the region. Some 80 percent of Tunisia's 10 million population now belong to the middle class, says the government, which measures this group based on home ownership, schoolin leves,an icoe.Whleth Wrl Bnk des'tcontpepl in te middle class, it generally agrees with Tunisian government indicators.

Tunisia has also lured capital from oil-rich Gulf countries for "megaprojects," such as huge infrastructure and housing ventures. Triki says about $10 billion have been committed despite the current cash crunch linked to the downturn and low oil prices.

But, he insists, the government has mainly pegged Tunisia's GDP growth on its skilled, often multilingual, high school and university graduates. "Our only resource is our people," Triki said.

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