Photo: Hidden Levers
I first came across Tunisians at the 2002 World Cup match against Belgium, in Japan. Although they played well and their fans were a fun bunch, I never really bothered with this small country before or after that. So why do we need to take notice about the events going on in Tunisia today?
Many speak of the violence that is spreading across the region, and in our era of highly leveraged, highly correlated emerging market managers, it is fair to worry about our neighbours in North Africa regardless of different fundamentals. Already we read of acts of self-immolation in Egypt and Mauritania similar to Mohamad Bouaziz’s act of martyrdom that started everything. But looking only at North Africa is a simplistic viewpoint that neglects the bigger picture.
Prior to the events of the past few weeks, Tunisia has long been held up as the model economy in the region, politically stable and especially attractive to Western corporations looking to trade and invest there. GDP grew consistently over the past decade, averaging over 5% per year and per capita GDP ranked 7th out of 53 countries in Africa. The Tunindex on Jan 7, 2011 (when the riots started) was up 77% over a 2-year period.
But these figures masked the real issues faced by Tunisians. The problems that sparked the riots are those faced by people throughout the world, not only those in North Africa and the Middle East. These concern even those in supposed first-world countries like the United States. Don’t they sound familiar? – High unemployment and lack of opportunity, increasing income inequality, lack of confidence in consumers, and lower real incomes due to rising inflation (especially in food prices).
Photo: Hidden Levers
I’m not saying that there will be riots in New York or Washington anytime soon, or that Obama and Bernanke will flee the country and seek refuge in Saudi Arabia like Ben Ali did. But all I want you to take out from this is that focus on macroeconomic numbers, especially aggregate and per capita figures, neglects to consider the everyday lives of those at the bottom.
Written by Pallop Angsupun for HiddenLevers.
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