Can Tunisia Become the Silicon Valley of the Arab World?

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The country could be a model for how economic innovation can help the changing Middle East succeed.

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Tunisian factory workers in Sfax Reuters


TUNIS -- Last November, dozens of young Arabs lined up for the chance to meet him. When he spoke of his struggles and triumphs, they hung on his every word. And when only one of the 50 attendees was chosen for training, some of the young Arabs grew frustrated and complained of being excluded.

A jihadist back from battling Americans in Afghanistan? A recruiter for al Qaeda's North African affiliate? A Hamas member looking for volunteers to attack Israel?

No, the visitor was a Tunisian-American eBay executive who has worked for Apple and Oracle, and founded two Silicon Valley startups. His audience? Young Tunisian entrepreneurs and programmers who dream of turning this city into the Arab world's Silicon Valley.

"There is a lot of potential," Sami Ben Romdhane, the eBay executive, told me in a telephone interview this week. "I don't see any difference between students who are graduating there and students who are graduating here and in Europe."

Fourteen months after a Facebook-facilitated popular uprising here sparked the Arab Spring, the appeal of American technology remains overwhelming. But a sputtering economy, the emergence of hardline Islamic Salafist groups and the failure of the United States and its European allies to deliver on promises of assistance are prompting growing frustration and instability.

Tunisia's revolution and its aftermath show how rapid technological change has altered economic, diplomatic and political dynamics worldwide. But outdated American notions of power - particularly in Congress - are preventing the United States from keeping pace. A decades-long American practice of spending vastly more on military efforts than civilian ones is handicapping a vital attempt here to create a democratic, free-market country that is a model for the Arab world.

The United States' strongest weapons against Islamic militancy are not CIA operatives, drones or infantry battalions. They are the modern, new high-tech office buildings that Hewlett-Packard, Fidelity, SunGard, Microsoft and Cisco have opened here in recent years. In the wake of the revolution, Tunisians dream of their country becoming a hub for cloud, big-data and open-government computing in the region.

"The revolution was through the Internet," said Leila Charfi, a Tunisian who runs the Microsoft Innovation Center here. "People are hungry to use new technology and develop a new country with IT."

To be sure, the fate of Tunisia rests in the hands of Tunisians. The country's first democratically elected government since independence from France in 1956 is being criticized for indecisiveness. The economy is slowing in many areas for local reasons, not foreign ones. And the United States is providing $300 million in assistance to Tunisia, including $100 million announced on Thursday.

And while Washington is influential here, Europe is and will be the dominant foreign player. France, the former colonial power, is the country's largest foreign investor. European countries provide the bulk of aid. And traditional exports to Europe are vital to Tunisia's economy, particularly agricultural products, clothing and auto parts.

But Tunisians - justly proud of their revolution - insist they are eager to serve as a model for the region. With little oil, they realize that economic innovation is the only way ahead. And they are looking to America's high-tech industry for inspiration and training.

A closer look at the Silicon Valley executive's visit revealed a well designed State Department program with too few resources. Ben Romdhane, the executive, traveled to Tunisia under Partners for a New Beginning, an initiative launched by the Obama administration after the president's 2009 address in Cairo. The program is designed to increase business, cultural and educational exchanges between the United States and the Arab world.

In conversations, Tunisians generally praised Obama's approach. They clamored for American business investment, tourists and exchange programs but said they opposed unilateral U.S. military interventions or American meddling in their domestic politics. At the same time, they disparaged radical Islam and said they yearned for prosperity, modernity and a place in a high-tech global economy.

Yet the program that brought Ben Romdhane and 19 other American technology entrepreneurs and angel investors here is so small that the delegation members had to pay their own airfare and hotel bills. The prize for the one Tunisian entrepreneur chosen for mentoring was three months in the TechTown Incubator in Detroit, Michigan. The U.S. government did not pay for the prize; the American Arab Chamber of Commerce in Detroit, Wayne State University and TechTown did.

Such a tepid effort shows how the U.S. and its European allies risk losing the post-Arab Spring peace. Since the ouster of dictator Zine El Abidine Ben Ali in January 2011, economic growth has dropped to near zero, foreign investment is down 30 percent and local businesses are desperate for a strong summer tourist season.

The prospects of Libya and Egypt are even bleaker, according to American officials. Tunisia holds by far the most promise of the Arab Spring countries. It has a population of only 10 million, a long history of moderation, universities that produce 6,000 engineers a year, millions of bilingual Arabic and French speakers, and centuries of interacting with Europe.

"We can have centers for excellence for IBM, Apple and Google for the region," said Khalil Zahouani, a 34-year-old, Microsoft-trained and Swiss-educated Tunisian entrepreneur who runs a 70-person startup that provides computing services to European and Arab phone conglomerates. "It could be an outsourcing hub."

To be fair, the State Department is mounting some innovative efforts. A $20 million enterprise fund has been created for Tunisia. Modeled after funds created for post-Communist Eastern Europe that made money for the U.S. government, the fund will invest in promising Tunisian businesses. A separate $8 million USAID program to train high-tech Tunisian entrepreneurs is planned as well. But those numbers are a tiny fraction of the $1.2 trillion the U.S. spent on the American military efforts in Iraq and Afghanistan since 2001.

In Tunisia's impoverished interior today, there is little sense of change. In the town of Gafsa, unemployed people demanding jobs have blocked roads to the town's phosphate mine, the fifth-largest in the world. Production is down 40 percent. And a Japanese company recently shut down its local factory after wildcat strikes.

In Sidi Bouzid, the farming town where Tunisia's uprising began, the luster of the revolution is fading. At 85, Ahmad Kadachi is the dean of the town's street vendors. Fifteen months ago, he was astonished when a fellow vendor - 26-year-old Mohamed Bouazizi - doused himself in gasoline, set himself on fire and sparked the Arab Spring.

As he sold tea from his ramshackle wooden cart, Kadachi called Bouazizi a hothead, while thanking him for the freedom he had brought. But he said Tunisians, Egyptians and Libyans were being denied a primary goal of their revolutions: prosperity.

"Everybody is talking and talking," Kadachi told me. "No one is doing anything."

Tunisians say they do not want handouts, loans or traditional aid. They want investment, exchange and a chance to be part of the world economy. So far, Washington's antiquated focus on military might has let them down.

This post also appears at Reuters.com, an Atlantic partner site.

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David Rohde is an investigative reporter for Reuters and a contributing editor for The Atlantic. A two-time winner of the Pulitzer Prize, he is a former foreign correspondent for The New York Times and The Christian Science Monitor. His latest book, Beyond War: Reimagining American Influence in a New Middle East, was published in 2013. More

He is also the author of Endgame and, with Kristen Mulvihill, A Rope and a Prayer. He lives in New York City.

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