The question is nothing short of provocative in light of the president’s ever nationalist discourse. But the facts remain. As it activates certain elements of policies recommended by the IMF, Carthage appears to be settling into place beneath the wing of its friends to the West.
After having left government to the task of establishing a program to eliminate subsidies for basic goods, President Kais Saied has switched gears.
President Saied’s hostile remarks about IMF injunctions have stirred public debate around economic alternatives to pull Tunisia out of crisis. The struggle is bitter between adepts of the classic « structural adjustments » prescribed to save flailing economies, and adherents of the president’s magical thinking-based approach.
Tunisia’s new agreement with the IMF is just two months away from becoming operational. The government, however, is far from being prepared to navigate what follows once it begins the precarious task of dismantling the subsidies system which covers basic goods and hydrocarbons. Rather than alleviating pressure on the country’s most vulnerable groups, it is likely to incite anger and indeed set off the social time bomb that it had hoped to disarm.
« Dire » is the word that IMF spokesperson Gerry Rice used to describe Tunisia’s economic and financial situation. During an online press conference on May 19, Rice urged the Tunisian government to pursue a reform program as a way out of its current impasse. But is a debt-fuelled solution the only way out? Several NGOs do not believe so, and propose alternative solutions to pull the country out of the crisis.
In early May, an official delegation to Washington D.C. met with International Monetary Fund (IMF) officials for discussions on a new loan program for Tunisia. According to a leaked, confidential document allegedly produced by the Tunisian government which Bloomberg reported on (but did not publish), the government proposed removing food and energy subsidies as part of these discussions. In May and June, the prices of several consumer goods, including subsidized sugar, were raised or increased. Some have claimed these price increases were meant to “appease” the IMF as part of the ongoing loan discussions.
This publication file is in the framework of the activities of the network of independant media on the Arab world. The regional cooperation is made by Al-Jumhuriya, Assafir Al Arabi, Mada Masr, Maghreb Emergent, Mashallah News, Nawaat, 7iber and Orient XXI.
In recent years, Egyptians have experienced a noticeable decline in their standard of living with the devaluation of the national currency and at the same time a substantial rise in the cost of goods and services. Something quite unusual in a country where over the past few decades changes have always been gradual. Egyptians interpret their difficulties as a consequence of the implementation of the “Economic reform” aimed at bringing the country out of the current crisis with a series of austerity measures decided by the IMF.
The demonstrations in the summer of 2018 put the economic policies pursued since the late 1980s back at the heart of public debate in Jordan. The dispute has opened up a political space that had disappeared since the failure of the “November” 2012 conflagration, and brought the issue of taxation back to the forefront of the discussions. Extending the debate to the global economic approach has at least made it possible to question several central points of the official discourse, in particular the recurring subject of debt reduction.
According to official figures, 11 billion dinars are currently circulating outside the Tunisian banking system. This calls for a constant refinancing of banks by the Tunisian Central Bank, due to the resulting lack of liquidity. Many factors may account for this situation, namely the size of the informal sector and the low rate of bancarization standing at 47% of the population. While this has been the case for many years, the situation could deteriorate in 2018 and 2019.
Nawaat addressed two questions to five foreign researchers who have written extensively about Tunisia’s politics and are familiar with the country’s particularities and complexities. It is a humble attempt by Nawaat to provide our readers with an outsider look that goes beyond Tunisia’s mainstream narrative, the polarized discourse and recurrent repression that accompanies every social movement.
After a four month delay which prompted observers to convey their concerns and suspicions about the International Monetary Fund (IMF) « lending freeze, » Tunisia is set to receive the second installment of its four-year $2.9 billion Extended Fund Facility (EFF) loan. The Tunisian government has agreed to set to work immediately with « delayed structural reforms, » including reducing spending on wages in the public sector and devaluing the national currency.
On February 25, Youssef Chahed announced the appointment of new heads to several ministries. The 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 UTICA, as Minister of Public Service. In a statement published on February 26, the UGTT deemed the move a deliberate provocation, and made in the interest of unblocking the second installment of a $2.9 billion loan from the 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.
It is perhaps owing to the urgency of his message, the grave threats that political instability in Libya and regional terrorism pose to Tunisia’s political climate in these next three months, the potential dissipation of a democratic alliance in the MENA region, the very straightforward request for military training and equipment, and more specifically twelve Black Hawk helicopters, that Marzouki’s appeal has been so widely diffused across US and international media outlets.
What is pertinent to note is that Marzouki’s request is the precipitous disbursal of materials that the US has already promised Tunisia.
What Jomâa did not say regarding contrasting political visions amongst the Gulf countries visited on his trip will weigh heavily not only on international relations and the actual support that Tunisia might receive from its alliances, but on the conditions for the support (if any) offered. Meanwhile images of blood-stained earth and bullet hole-scarred buildings permeate national news following clashes between national security forces and militants in Jendouba and Sidi Bouzid.
We all work for the IMF now. And if you haven’t realized that yet, I urge you to wake up to your new condition so you will not be caught unprepared. The sooner we all realize that, the smaller (hopefully!) the shock will be.
Tunisia’s Finance Minister Elyes Fakhfakh said last week the government expects to sign a $1.8 billion loan deal with the International Monetary Fund by May. An IMF team arrived in Tunisia for talks on April 8 before another meeting in Washington later this month, Fakhfakh said in an interview at Bloomberg’s Middle East headquarters in Dubai.
It is important to note that since 2012 until the present day, the country has accumulated about ten million dollars in debt. In this vicious cycle where a debt is used to pay another debt, it is important to ask the following questions: Where will this debt take us? Where does the money go? Are the government’s cessions sufficient?
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