|Sousse Medina in 2006|
The unrest in Tunisia came out of the blue, sparked by a young unemployed man who set fire to himself after being deprived by town officials from selling vegetables. Initially the protests were limited to Sidi Bouzid – a town who’s economy is based on agriculture – but these then spread before reaching their logical conclusion last week. Similar unrest has occurred in Cairo over the past couple of days, as Egyptian protesters have similarly looked to topple their dictatorship. The reason for these outbursts has been pinned on the frustration at a lack of freedom, and the excesses of the ruling classes. I suspect that there is another reason. It’s the economy stupid.
Greece, Portugal and Spain all found themselves in difficulty last year, with Greece forced into a bale-out from the European Central Bank. All three were popular destinations for British people to go on holiday, and to put money into their economies. Assuming that each couple spends £300 when they go abroad, then each plane would bring £60,000 for the local economy. Being another popular holiday destination, Tunisia was always going to struggle with the lack of visitors to it’s country, and a diminishing flow of money into the country. Hotels have to cater for people, so less people means less food to buy which brings us back to our unfortunate vegetable seller.
It’s now becoming clear that the lack of liquidity in the British economy is now having an effect on the countries that sees an influx of visitors from these shores. Glasgow Airport reported a drop in passenger numbers of 30,000 for July last year, the lowest figure in four years. The lack of liquidity is already having an effect on the UK economy, with poor growth figures showing that the Britain is tottering on the brink of a second technical recession when the hangover from the first technical recession has not abated. The problems with the British economy have shown that Boy George’s scorched earth policy is simply a non starter, and that’s before the cuts really bite.