Tunisia’s political experiment threatens economic collapse

Tunisia’s political experiment threatens economic collapse

NICE France — Tunisia’s increasingly authoritarian President seems determined to overthrow the country’s political system. Experts say the strategy is threatening a democracy that was once a model for the Arab World.

The International Monetary Fund has frozen an agreement meant to help the government get loans to pay public sector salaries and fill budget gaps aggravated by the COVID-19 pandemic and the fallout from Russia’s war in Ukraine.

Foreign investors are pulling out of Tunisia, and ratings agencies are on alert. Many Tunisians, once proud of their country’s relative prosperity, are now struggling to make ends meets due to inflation and joblessness.

An election debacle a week ago has made matters worse: Just 11% of voters took part in a first-round vote for a new parliament meant to replace a legislature disbanded last year by President Kais Saied. Opposition figures, including those from the popular Islamist group Ennahdha are demanding that he resign. Unions are also threatening a general strike.

Saied designed the elections to replace the parliament and reshape it. This was part of broad reforms that he claims will solve Tunisia’s multiple crises. Near-boycott of the election was due to disillusionment among voters with the ruling class in the face of dire economic problems.

Tunisia’s Western allies, such as the United States and France expressed concern and urged President Obama to create an inclusive political dialog that would benefit the slow economy. Tunisia was the birthplace for the Arab Spring democratic uprisings years back.

Saied dismissed criticisms of the low voter turnout and said that what really matters is Jan. 19. He claims his reforms are necessary to rid the country from the corrupt political class as well as Tunisia’s foreign enemies. He slammed his political foes from the Ennahdha party which had the largest number in the previous parliament. He ordered the arrest of Ali Larayedeh, its vice-president, on terrorism-related charges.

“Saied appears impervious to criticism, and intends to bulldoze his way to a different political system, no matter how many Tunisians are involved in the process,” Monica Marks of the New York University in Abu Dhabi, a Tunisia expert.

“No Tunisian requested that Saied reinvent Tunisian politics, write a new constitution, and overhaul the election law,” Marks stated. “What Tunisians have been asking is for a more respectful government that meets all their needs and gives them economic dignity,”

Saied said.

But he has yet to present an economic recovery plan or strategy for his deeply indebted government to secure funds to pay for food and energy subsidies. The president has made it difficult for economists to work in state institutions, which has slowed down the country’s budget and harmed foreign investors. In recent months, Tunisians have been affected by rising food prices and shortages in fuel and basic staples such as sugar, vegetable oil, and rice. According to the National Institute of Statistics, inflation has reached 9.1%, which is the highest level in three decades. Unemployment stands at 18% percent according to the World Bank.

“President Saied naively seems to think that if only he can complete his political roadmap, the economy will fix itself,” said Geoff Porter, a New York City-based North Africa risk assessment analyst, in a recent brief.

Tunisia signed a preliminary agreement in October with the IMF for a $1.9 million loan. It would allow the heavily indebted Tunisian government access to loans from other donors over a period of four years in return for sweeping economic changes that include shrinking one of the largest public administration sectors in the world and gradual lifting of subsidies.

The agreement was subject to approval by the IMF executive board, which was scheduled for December. 19. According to TAP, the state news agency reported that the IMF executive board had to approve the agreement. This was scheduled for Dec. 19. He said that Tunisia’s economic decline will accelerate if it does not receive IMF funds.

Foreign investment in Tunisia is a concern.

Pharmaceutical manufacturers Novartis, Bayer and GlaxoSmithKline are leaving the country because they are not getting paid by the insufficiently funded state pharmaceutical distributor.

Royal Dutch Shell is a company that operates two gas fields which accounted for 40% Tunisia’s domestic production. It announced in November that it would be leaving Tunisia by the end of the year. Porter stated that despite the hype surrounding the country’s hydrogen industry, little has been done to attract investors, as the country’s regulatory institutions are paralyzed due to Saied’s political moves.

The president also lost the support of the country’s powerful trade union, UGTT, in return for a bailout. According to the state TAP news agency, Noureddine Taboubi, UGTT leader, agreed to meet with the government to discuss a new “social agreement” to aid Tunisians in financial distress in August. Taboubi, who represents 67% most of Tunisia’s workforce, has recently retracted his commitment. He reaffirmed his opposition to the main IMF demands for a loan program: a freeze in wages for the public sector and restructuring state-owned businesses.

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Bouazza ben Bouazza contributed from Tunis, Tunisia.

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