September 27, 2011 10:45 pm

Tunisian businesses seek to nurture start-ups

After the revolution that overthrew the regime of Zein al-Abidine Ben Ali last January many Tunisian companies found themselves bearing the brunt of popular anger over the ousted regime’s corruption, and the chronic youth unemployment that remained.

Many of these companies are now trying to address this legacy of the old regime. Business associations formed since the revolution are, like the country’s political parties, focusing on the urgent need to encourage investment to create jobs as key to long-term stability.

The measures they advocate range from more mentoring for small start-ups to better economic integration across north Africa.

Najeh Hadj Letaif remembers how just one day after Mr Ben Ali fled, men armed with sticks and knives burst into the clothing business he manages and made off with computers, raw materials and anything else they could carry. “They were just very poor local people. I don’t really blame them,” he said.

Scores of factories or offices were torched across the country, and in the following weeks and months there were demands for unpopular managers to be replaced, strikes for improved pay and conditions, and sit-ins where impoverished villagers blocked access to plants.

Mr Letaif and a handful of old college friends and business contacts in those months formed Nama’a (”growth” in Arabic) as an association advocating new incentives for investment in marginalised regions and measures to help unemployed college graduates start their own businesses.

Of Tunisia’s population of 10.6m, about 700,000 are estimated by the government to be unemployed. Of these, about 170,000 have degrees or higher education diplomas.

Until a new government is appointed after the October 23 election, there will be little fresh investment, Mr Letaif said. But Nama’a, which now has more than 100 members from the business community, is building links with foreign NGOs specialising in funding start-ups and with expatriate business people.

Although it has no political allegiance and has met with leaders of four leading parties, its message of social responsibility chimes with that of the main Islamist party, Nahda, which is expected to emerge strongly in the October poll.

Mr Letaif, who grew up in a central Tunisian village where most homes still have no running water, used a rural metaphor on the role of religion in the country’s policymaking: “To grow a crop you need to know the land you are planting on, and in Tunisia the parties need to at least acknowledge Islam in their programmes, or they won’t be able to do anything.”

Nama’a plans contacts with government – the transitional government is about finalise a new scheme directing private equity financing towards start-ups – and with the large family-based conglomerates that dominate the business sector.

Its goals are not far removed from those of another new association, the Tunisian Confederation of Citizen Entreprises (Conect), which plans to offer an alternative to the main business lobby, Utica. Connect is headed by Tarak Cherif, whose Alliance business group, founded in 1947, used to be a large electrical appliance manufacturer until interference in the sector by members of Mr Ben Ali’s wider family left it unable to compete.

For those involved in the rampant corruption in the last years of the Ben Ali regime, “we must let the courts do their work”, Mr Cherif said.

Connect will meanwhile focus on better funding and advice for small and medium-sized businesses so that potential young entrepreneurs in provincial towns have more role models. It will also look at improved wages in tandem with better productivity, and on good governance, respect for the environment, and an improved corporate tax take.

“Responsible companies pay their taxes,” Mr Cherif said.

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