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The Tunisian uprising that triggered Arab Spring is a paradox in the making. The uprising was, in part, the result of rising unemployment and a deteriorating economy under the kleptocracy of Zine el Abidine Ben Ali, the dictator who fled Tunisia on Jan. 14, 2011, for Saudi Arabia. Yet 15 months after the revolution, the jobless rate is higher than ever and the economy is in recession.

Ditto Egypt's. The Arab Spring is turning into Arab Winter, at least economically speaking.

The danger, of course, is that the moderate Islamist government in Tunisia, and the expected moderate government in Egypt (currently under military rule), could get swept away if their economies fall apart, opening the door to much more conservative, even radical, rule. The European Union might want to lend a helping hand. Failed economies on its Mediterranean doorstep are not what it needs, all the more so when several of the EU's own economies – Greece, Portugal, Spain, Ireland, Italy – are in dire shape.

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In many regards, Tunisia is the model Arab Spring country. While about 300 Tunisians died in the revolution, the body count could have been much higher. A fair election produced a democratic government. The banking network and payments system did not collapse, thanks to the quick work of Mustapha Kamel Nabli, the World Bank economist recruited during the revolution to head the newly independent Central Bank of Tunisia.

Civil society in the freed country is flourishing, in spite of sporadic attempts by the government to gag free speech (recently, two young Tunisians were sentenced to seven years in prison for posting cartoons of the prophet Mohammed on Facebook).

Now the bad news. The Tunisian economy is in rough shape, a huge disappointment to the many Tunisians who thought political freedom and the end of Mr. Ben Ali's piracy would translate into new prosperity. Tunisia's gross domestic product fell 2.2 per cent in 2011, the year of the revolution. In the first quarter of this year, growth was flat, meaning the economy has yet to emerge from recession (the Egyptian economy contracted last year for the first time in a decade and its bond yields are soaring).

Worse still is the rising jobless rate. The Tunisian unemployment rate is 20 per cent, double the pre-revolution figure and comparable to the worst rates in the euro zone countries. Youth unemployment is 30 per cent. The streets of Tunis are filled with beggars and men standing on street corners and in coffee bars with nothing to do. They must be wondering: So what was that all about?

How did the numbers deteriorate so rapidly?

Tourism, a crucial economic component, collapsed last year and has made only a tentative comeback. The kilometres of wall-to-wall hotels in Hammamet, the vast seaside resort about an hour's drive southeast of Tunis, are largely empty. Five-star rooms can be had for the equivalent of €50 ($66) a night. Bank lending to businesses, while finally expanding, is still tight.

Foreign investment dried up, probably for fear that the Tunisian revolution would be long and bloody or that the new Islamist government would be unfriendly to business. Business confidence has yet to return. The government's two challenges to the independence of the central bank – both repelled by Mr. Nabli – did not help on that front.

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Tunisia's economic environment has also suffered from the lack of experience among the ministers and senior bureaucrats in the fresh government. Some of them spent years or decades in exile, or in prison, under the brutal Ben Ali regime. The Prime Minister himself, Hamadi Jebali, spent 15 years in prison, 10 of them in solitary confinement. The civil war in neighbouring Libya and the deep recessions in the euro zone's Mediterranean frontier have made a bad situation worse.

By dropping interest rates and stabilizing the banks and the payments system, the central bank has done pretty much all it can in the short term to prop up the economy. It's now up to the government to provide stimulus. But there does not appear to be a lot of room to manoeuvre. The budget deficit is expected to almost double this year, to 6.7 per cent or so. With financing becoming difficult, the Tunisian government may do a private placement of dollar-denominated treasury bills with the cash-rich Qatari government.

No one said the Arab Spring would produce instant economic wealth. But for the Tunisian and other Arab Spring revolutions to succeed, their economies cannot be allowed to collapse. Tunisia has already received loans from the World Bank and the African Development Bank and may tap into the International Monetary Fund.

The EU should get more involved too with everything from cheapie loans and technical expertise to regulatory advice and lessons on the benefits of open markets and competition, all the better to encourage a generation of entrepreneurs bent on exporting to the European Union, still the world's biggest market. Tunisia needs a bold economic revolution to match its courageous political revolution.

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