In many respects, the tenor of the Tunisian Investment Forum held on the outskirts of Tunis in June was no different from similar events around the world. The general themes of optimism and opportunity were sounded out to a healthy turnout of local businesses, investors and government officials. A promotional video featured international managers happy to commend the quality of the local workers they employed and the ‘can-do’ attitude of the Tunisians.

And yet, of course, Tunisia is not like anywhere else in the world. It was only in January that strongman President Ben Ali was ousted and fled to Saudi Arabia. He has since been tried in absentia by a Tunis court and sentenced to 35 years’ imprisonment.

By no means were these issues shirked at the conference. Indeed, the rhetoric of the revolution was used with such abandon that the revolutionary scent of jasmine could almost be smelt among the aftershave and coffee cups. Although cynics might say that 'revolution' is too strong a term – given quite how much of the Tunis political and business establishment remains intact – regardless of how vigorously the banner of freedom is waved.

Tunisia's known unknowns

From a marketing perspective, the notion of political upheaval needs to be handled carefully because for many investors the term spells only uncertainty. But to its credit, the transitional government (or at least, its representatives at the conference) has been honest regarding Tunisia’s “known unknowns”.

It was the speech of central bank governor Mustapha Kamel Nabli that cut most swiftly to the quick. The revolution, he said, had failed to meet the increasingly urgent calls of its people for jobs. Economic growth has slowed since the uprising. Unemployment, particularly among graduates, is at a record high. The war on Tunisia’s doorstep is draining the public purse and investment is falling. If the situation does not improve quickly, he said, the transition itself is in jeopardy.

However autocratic and corrupt, investors understood the rules of the game that applied during the 'bad old days'. For many companies, especially larger players in strategic sectors such as telecommunication and construction, this meant an obligation to pay bribes to and partner with members of the Ben Ali entourage and clan. It was an unsatisfactory, but necessary requirement of business and it doubtless gnawed at profit margins.

Ratings downgrade

In the months since the uprising, 41 foreign companies have pulled out of Tunisia with the direct loss of 2800 jobs and ratings agencies have downgraded it considerably. Foreign direct investment in industry in the first quarter of 2011 was down almost one-quarter compared with the same period in 2010 (TD76.2m or $54.7m compared with TD99.5m), according to the figures of the Foreign Investment Promotion Agency.

The agency blames the decline on security fears and the wave of social unrest unleashed by the revolution. And there seems to be no end to the discontent, with graduate unemployment at 44%. As the governor himself pointed out: “By the end of the summer, more graduates will enter the job market with high expectations and a dearth of opportunities.”

In the heady days of Spring (seasonal, not figurative), the outside world held hopes that the Jasmine Revolution would provide a template for the political renaissance of the Arab world at large. Those hopes have sinced been dashed. As revolutions go though, Tunisia’s could be called a success. The loss of life has been limited and calls for retribution muted: the palpable mood is that the country wants to return to an even keel.

Purging talent

Still, the air has yet to be fully cleansed. One of the issues currently keeping local newspapers enthralled is the process of 'degagement'; the quiet (i.e. unofficial) purging of academics and other professionals who are regarded as having been too close to the Ben Ali government and its cronies. “The problem,” one Tunisian professional told fDiMagazine, “is that the old regime was very good at making everybody feel that they, too, were somehow complicit in the system, even if it worked against them. This means that there’s a lot of scope for finger-pointing now.”

Sabrina Makkes, a lawyer at the Tunis firm B&K Associates, said the 'purging' extends to foreign companies. For example, investors who were forced to accommodate the wishes of bribe-taking and condition-making power-brokers to do business in Tunisia. Now, she said, they are resorting to the law to rid themselves of the vestiges of that potentially incriminatory involvement: letting go of managers, assets, investments and employees.

Meanwhile, two committees have been established for the purpose of confiscating and redistributing assets stolen by the privileged and acquisitative elite. The process is dubbed 'the labyrinth', reflecting the complexity of the holding structures used to disguise ownership.

Open to business?

Doubtless there are fears that the more things change, the more things will stay the same. An Italian lawyer at the conference said that despite Tunisia's mantra of being 'open to business', many sectors of the economy remained highly protectionist. “It is not the law itself that presents a barrier to entry,” he said, so much as the attitude of existing players.

But the greatest challenge is the political situation: everything, including the nation’s constitution and likely presidential contenders, is uncertain. And, lacking a clear mandate from an electorate hungry for a meaningful representative government, there is only so much that the current transitional government is likely to commit to.

Signs of hope

Despite the long shadows, there are signs of hope. While investment is down as a whole, it has risen in the service sector and 13 new investors have entered the country, while 64 companies with a pre-existing presence have extended their investments in the country. Speakers at the conference included Ferdinand Terburg, the chief executive of Van Laack shirt manufacturers in Tunisia and vice-president of the Tuniso-German chamber of commerce. He told delegates that despite the economy having slowed down, “the fact is that Tunisia is creating new opportunities for investment”.

Meanwhile, Dominique Alexander, general manager of the EADS subsidiary Aerolia, described the continuing success of his company’s operations in the country, assembling subsets for the aeronautics industry.

And while it is no guarantee of Tunisia’s successful transformation to a fully functioning democracy and economy, the international community – as much for its own strategic reasons as anything – is keen to see Tunisia’s continued success. 

Cash certainly helps. At the G-8 meeting at Deauville in May, the members announced a “partnership” under which mulilateral development banks are prepared to raise $20bn for Egypt and Tunisia by 2013, while the EU and the US say that they are committed to assisting Tunisia in the long term in their own respective capacities. Reinforcing the point, European Commissioner for Trade Karel de Gucht said: “International partners want to help [Tunisia].” Tunisians have demonstrated that there is a great deal that they can do on their own.