On 8 March, Tunisia’s Prime Minister Ali Laarayedh announced the formation of a new coalition government that is hoped to bring unity to a country shattered by the shock assassination in February of a prominent opposition leader and the subsequent resignation of the premier.

The new government consists of a three-party coalition between Ennahda, the moderate Islamist party that won the largest share of seats in elections to the Constituent Assembly in October 2011, the social democratic Ettakatol party and the centre-left Congress for the Republic.

The coalition members are the same three parties that made up the government led by Ennahda Secretary-General Hamadi Jebali, who resigned on 19 February in an effort to stem the rising tide of protests that followed the assassination of Chokri Belaid, leader of the secular leftist Democratic Patriots’ Movement, on 6 February.

Key ministries in Tunisia

What is different about the new administration is that Ennahda has relinquished its control of key ministries. Othman Jarandi, a career diplomat and former ambassador to the UN, has been named as foreign minister. Lotfi Ben Jedou, the new interior minister, and Rachid Sabbagh, the new defence minister, are both judges. Elyess Fakhfakh, an economist and Ettakatol member, retains his post as finance minister.

The new cabinet features 11 other members of the Jebali administration. They include Agriculture Minister Mohamed Ben Salem and Human Rights Minister Samir Dilou, both of who are Ennahda members, and Culture Minister Mehdi Mabrouk, who is an independent.

Laarayedh ran the deadline close for the appointment of the new cabinet. Following his elevation from the post of interior minister on 22 February, he was given two weeks to form a new administration. At the time of his appointment, commentators stressed the need for a government to be formed as quickly as possible to avoid a protracted period of instability. But a difficult period of negotiations meant that the new leader used every minute at his disposal. “Our country needs national unity,” Laarayedh told a news conference following his announcement of the new administration. “You must be patient. The road to democracy is long.”

The appointment of the new cabinet has gone a considerable way to addressing the opposition’s concerns that the government was dominated by Ennahda, an issue that finally came to a head with the demise of the previous administration.

After the assassination of Belaid, Jebali who was prime minister at the time, argued that technocrats must be brought into the government in order to restore national unity. Leading party members, including Ennahda chief Rachid Ghannouchi, refused to back Jebali, and he tendered his resignation. “Jebali’s resignation after the assassination of Belaid was the government’s saving grace,” says Raza Agha, chief economist for the Middle East and Africa at Russian investment bank VTB Capital. “I’m not sure the same thing would have happened in other [Arab] countries going through political transition.”

The decision to cede three of the four sovereign ministries to independents, moreover, indicates that there has been a turnaround in the viewpoint of the Ennahda elders.

Positive step

“The fact that Ennahda has compromised is a positive step,” says Marina Ottaway, senior scholar at the US think-tank Woodrow Wilson International Center for Scholars. “There has clearly been some give on the part of the party’s leadership.”

Whether the compromise will satisfy the opposition, some of who wanted a government composed entirely of technocrats, remains to be seen. “The key question is whether the government can sell this new arrangement domestically to the population, and that remains a question mark,” says Agha.

Ottaway agrees: “It depends whether you see the glass as half full or half empty. Ennahda has given in to the idea of giving some key posts to technocrats, but not the whole administration. Doing this would have meant bringing in a lot of people, who had been close to [former president Zine el-Abidine] Ben Ali, because these were the only ones with any experience of government.”

In contrast to Egypt, where the Freedom and Justice Party, an offshoot of the Muslim Brotherhood, has been conspicuous in its dominance of all arms of state, in Tunisia there has been a much more apparent effort to compromise.

Although the leader of the government is an Ennahda member, Moncef Marzouki, the president, is the leader of the Congress for the Republic, while the speaker in the Constituent Assembly, Mustapha ben Jaafar, is the secretary-general of Ettakatol. Between them, the three parties of the governing coalition hold 109 out of 217 seats in the assembly. The recent introduction of technocrats to key cabinet posts gives an even greater sense of balance to the administration.

“What was a really positive surprise was not that Ennahda won [the elections to the Constituent Assembly], but that they were prepared to accept secular and liberal figures into the government,” says Agha. “Elsewhere, it seems that the Islamists were wanting to dominate the political scene, but that didn’t seem to be the case in Tunisia.”

Opposition stance

What might seem like a fair compromise, though, may still be contested by an opposition that seems unwilling to acknowledge the importance of election results. “There seems to be a trend developing in Egypt and Tunisia where the opposition doesn’t appear to accept the idea that getting more votes than other parties carries weight in the appointment of a government,” says Ottaway.

“Maybe the new government doesn’t meet the opposition’s expectations, but I think that these expectations were unrealistic. One should not expect every government to be an all-party government.”

Dissatisfaction with the new government was immediately evident on the streets of Tunis. The day after the new cabinet was appointed, a demonstration in the capital purportedly in support of women’s rights became a forum for the opposition to voice their objections to the latest compromise. Protesters carried placards decrying the new appointments. “The cabinet reshuffle was a piece of theatre,” read one.

Ennahda’s efforts to further broaden the coalition to five parties were ultimately thwarted by a reluctance among opposition parties to participate in the new administration.

“Who knows why they said no,” says Ottaway. “Maybe they felt that joining the government at this late stage might tarnish their reputation ahead of the next elections.” The government faces other political challenges too. Chief among these are how to manage the orthodox Islamist Salafi group that has also shown that it is not shy of making its presence felt in the streets, and the delicate matter of the investigation and trial of the Belaid murder case. “It has surprised me how vocal the Salafists have been, and the hard line they have taken – even harder than the Al-Nour party in Egypt,” says Agha.

Our country needs national unity. You must be patient. The road to democracy is long

Ali Laarayedh, Tunisia’s prime minister

The handling of the Belaid case could still be a threat to stability. The government has pointed a finger of blame at the Salafi movement, while opposition figures have accused the regime itself of being behind the killing. “It’s a challenging time for the government. It’s extremely important that they find those responsible. I hope it doesn’t turn out to be a protracted investigation. But the signs are positive that the government wants to do the right thing,” says Agha.

The success of the new government will ultimately be measured on whether it is able to preserve social stability for long enough that it can deliver on the remaining stages of the country’s political transition.

On the day that the new cabinet was announced, Laarayedh declared that the government would only serve until new elections were held, and that they would take place no later than November.

This is significantly later than was originally planned. But elections are dependent on the introduction of a new constitution, and this process has been mired in delays. “The constitution process seemed to be making a lot of progress, but now it seems to have stalled,” says Ottaway. “The irony is that the opposition constantly accuses the government of stalling, but they are themselves preventing progress.”

This government is going to be in power for a few months. Everyone knows there’s going to be another showdown

Marina Ottaway, Woodrow Wilson International Center for Scholars

Delays to the election process, meanwhile, mean that the period of uncertainty for investors has been further extended. Inevitably, this will have consequences for the strength of Tunisia’s economic recovery. “I don’t think the economy will truly be stabilised until after the next elections,” says Ottaway. “This government is only going to be in power for a few months. Everyone knows that there’s going to be another political showdown soon.”

Tunisia less vulnerable

Tunisia’s relatively low borrowing requirements mean that it is less vulnerable than some of its neighbours, but it is not invulnerable. In December, the US’ Fitch Ratings downgraded Tunisia’s sovereign ratings due to the protracted political transition. On 19 February, another US rating agency, Standard & Poors, lowered its long-term foreign and local currency sovereign ratings, due to the “marked increase” in the risks to the country’s political transition following the assassination of Belaid.

“Tunisia’s economic challenges are not as great as many Arab countries that are undergoing political transition,” says Agha. “The fiscal side is problematic and the external environment remains challenging, but these problems are quite modest in relation to their peers.

“On the other hand, they do have the double whammy of the problems in Europe – which is Tunisia’s largest trading partner, its largest source of investment, and its largest source of tourism revenues – and a protracted period of political uncertainty. If this political uncertainty continues, it could lead to delays in securing international donor support and the challenges could mount.”

The government’s success in securing a planned $1.8bn loan from the Washington-headquartered IMF remains crucial to the country’s economic prospects in the medium term. “Many bilateral and multilateral donors require the IMF loan to be in place because it gives credibility to the government’s economic reform programme and reduces the country’s borrowing costs,” says Agha.