Chahed courts the IMF, Tunisian General Labor Union defiant

On February 25, Prime Minister Youssef Chahed announced the appointment of new heads to Ministries of Religous Affairs, Public Service, and Commerce. The Tunisian General Labor Union (UGTT) lost not a minute in denouncing what it called a politically-driven and unilateral decision to replace Abid Briki, former UGTT Under Secretary General, with Khalil Ghariani, head of social affairs for the Tunisian Union of Industry, Trade and Handicrafts (UTICA), as Minister of Public Service. According to a statement published on February 26, the UGTT called the move a deliberate provocation, and made in the interest of unblocking the second installment of a $2.9 billion loan from the International Monetary Fund (IMF). The conflict, which culminated in Ghariani’s refusal to accept the nomination and the subsequent suspension of the Ministry of Public Service on March 2, is the most recent flare-up in the tenuous relationship between the current government and country’s largest workers union.

IMF pushes for « urgent action » to implement reforms, Chahed complies

Since the beginning of his tenure in August 2016, Chahed pledged to break with previous governments’ failure to tackle the country’s economic crisis, appealing to foreign investors and financial institutions with proposals that echo their recommendations for growing the economy. « We are looking for financial means to repay our debts, we have knocked on the door of the IMF because we are obligated to do so, we have called upon the IMF for help, » Chahed said in August.

Following a visit to Tunis meet with the head of government and Ministers of Finance, Investment, Public Service, a team of IMF staff reported in February that « urgent action is needed on fiscal policies and delayed reforms. The team welcomes the government’s resolve to move ahead with modernizing civil service. »

According to the IMF mission chief for Tunisia, « Public debt has continued to increase, reaching more than 60% of GDP in 2016 … The public wage bill as a share of GDP is among the highest in the world, and the external current account deficit remains elevated … The authorities have outlined their near-term priorities to include mobilizing more tax revenue in a fair and efficient way, rationalizing the public-sector wage bill to create more space for public investment … »

Three weeks later, on February 26, Chahed announced economic reforms for 2017, which are to focus on economic financing, the public sector, state-owned companies, and social security. Repeating the IMF’s projections, he anticipated a 3% growth rate for the coming year, based on the privatization three state-owned banks (Société tunisienne de banque, Banque National Agricole, Banque de l’habitat) voluntary lay-off programs for state employees to cut government spending on wages, and pushing back the retirement age to reduce the social security deficit.

Unity government frought with tension

As eager as the « unity government » has proven over the past seven months to carry through with prescribed reforms, the UGTT has remained defiant every step of the way. From day one of Chahed’s tenure, the Union opposed several newly-appointed ministers whose nominations were deemed politically-motivated and incongruous with the realities and circumstances of the sectors in question. During their first meeting in September, Chahed and former UGTT Secretary General Houcine Abassi negotiated the continued recruitment of civil servants in the ministries of health and education, but the peace was short lived. When the government presented a new finance draft law in November, the UGTT rejected the proposed economic measures, including a freeze in wage increases, and accused the government of disrupting negotiations and acting unilaterally. The same month, the Union threatened to hold a general strike if a new agreement could not be reached, and, after the intervention of President Essebsi in early December, negotiations were resumed. The strike was called off after an agreement was signed, designating among other actions the disbursal of wage increases for 2017.

Ghariani nominated to head the Ministry of Public Service

It was the Prime Minister’s unexpected decision to reshuffle the heads of several ministries that roused the UGTT into a fury last week. On February 25, Chahed appointed Khalil Ghariani, in charge of social affairs within the UTICA, to replace Abid Briki, former UGTT Under Secretary General, as Minister of Public Service and Governance.

Upon the announcement of Ghariani’s nomination, the UGTT called for an emergency meeting for February 26. The Union considered « the appointment of a businessman to the head of the Ministry of Public Service as a provocation against civil servants and a hit to their salaries, and as blatant disregard for public service to meet the recommendations of the IMF and we demand a review of this appointment. » Repeating arguments often raised over the past months, the Union claimed that the decision had been made without consulting political parties and social actors in contradiction with the Carthage Agreement, that it was not based on an evaluation of government performance, did not correspond with the specific circumstances of unemployment and deficit, nor to the interest of citizens.

Though in the days that followed the Prime Minister defended with resolve Ghariani’s appointment, it was the nominee himself who ultimately ceded to the pressures of conflict, and, on March 2, declined the position. The decision, Ghariani explained, was made in deference to the balance between labor unions and « in view of the tense political and social atmosphere of the past 48 hours. » Within hours of the announcement, Chahed responded in turn by dissolving the Ministry of Public Service and Governance, and transferring the responsibility of its structures and functions to his government.