“2023, year of all dangers for Tunisia”

2023-01-20T16:49:43.941Z

FIGAROVOX/TRIBUNE - Weighed down by colossal debt, inflation that exceeds 10% and questionable political choices, Tunisia is in the grip of events that could seriously threaten social peace, warns the professor at the University of Carthage, Skander Ounaies .

Skander Ounaies is a professor at the University of Carthage, Tunisia.

He was an economic adviser to the Sovereign Wealth Fund of Kuwait, KIA.

Tunisia is currently going through a very uncertain period from all points of view.

Indeed, we witnessed, on the one hand, the first round of legislative "elections", on December 17, 2022, marked by a record abstention rate, with 8.8% of voters, or nearly 805,000 people, on nearly 9 million potential voters.

The “correction” that came later (the participation rate rose to 11.22%) does not change the situation, namely sham elections.

On the other hand, on December 14, 2022, the International Monetary Fund (IMF) postponed (a diplomatic euphemism)

indefinitely

the examination of Tunisia's file, supposed to give its approval for the granting of a loan of 1, $9 billion.

This event reinforces a general climate heavy with uncertainties.

From the year 2012, the first post-revolution year, a succession of "errors" will lead to the current very critical economic and social situation.

Thus, three major facts will weigh down the dynamics of the country.

First, the "compensation" for the victims of the old regime estimated by the Ministry of Finance at 1 billion euros, pumped directly in 2012, from the state budget.

Then, the introduction of terrorism into the country, in full view of our economic and political partners at the international level, had serious economic consequences (a negative impact on tourism, a key sector for the country in terms of the return of currencies).

Finally, the last element, the hiring in the public service of nearly 200,000 people without any training, and for the most part without competition,

The budget deficit estimated at 6.7% of GDP at the start will probably be around 7.5% at the end of the financial year (ie 2.5 times the limit set by the Maastricht agreements for EU countries).

Skander Ounaies

Added to this is the monumental error of economic "policy", which consisted in considering that Tunisia was undergoing a demand shock, when in reality it was a supply shock.

It was necessary to act on the side of the companies, by a policy of support for competitiveness, by subsidizing certain costs for example, and in a temporary way.

On the contrary, the choice to increase wages had two negative effects in the long term: it made it possible to develop the informal sector, on which a large part of the population is supplied, and to prepare the ground for inflation, which exploded. This year.

Despite multiple warnings from several economists in the country, this unforgivable error lasted for years.

This ultimately results in a very complicated end to the year 2022 in terms of public finances.

The budget deficit estimated at 6.7% of GDP at the start will probably be around 7.5% at the end of the financial year (ie 2.5 times the limit set by the Maastricht agreements for EU countries).

Public debt peaks at nearly 35 billion euros, or nearly 89% of GDP, according to the IMF, which includes public companies in its calculations.

The external debt reached 42 billion euros (nearly 93% of GDP at June 2022).

And, finally, inflation exceeded 10% at the end of the year.

The year 2023 therefore promises to be very difficult from all points of view for the country.

Tunisia is declining in terms of wealth creation, since, still according to the IMF, the GDP of 2022, in constant dinars, is almost equal to that of 2017.

Read alsoIn Tunisia, democracy is broken down

The immediate consequence is high unemployment (nearly 17% of the active population) which mainly affects young people (46% among 18-24 year olds).

This unemployment directly explains two major facts: the explosion of irregular immigration, mainly to Italy, with more than 16,000 migrants, since January 2022, including 3,500 minors, and the fall in the level of confidence in the government, which fell to 15%, far behind Morocco (48%) and Algeria (26%), according to World Bank figures from September 2022.

The latest independent note from Fitch Ratings (March 2022) relegates Tunisia to the rank of country at "default risk", in the same way as Lebanon.

Skander Ounaies

The coup of July 25, 2021, carried out by President Saied, with the suspension of parliament and the dismissal of the government, aroused immense hope for renewal among the Tunisian people, tired of a catastrophic governance, and this by all successive governments since the first free elections in October 2011. This hope was quickly dashed, since the country remained practically three months without a government, thus raising fears of presidential orientations far removed from the main concerns of Tunisians (unemployment, the loss increasing purchasing power).

These fears were justified, because the main actions taken since then by the president have almost all been political in nature, with the aim of shaping the "new vision" that he seeks to apply to the country,

ignoring the economic aspect.

As proof, the latest independent rating from Fitch Ratings (March 2022, CCC rating) relegates Tunisia to the rank of country at “default risk”, in the same way as Lebanon.

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Thus, the national electronic consultation of March 20, 2022, with only 500,000 voters out of the potential 9 million, is a response to the Tunisian constitutional referendum of July 25, 2022 (27.5% of voters) which allowed the population to decide on a new constitution.

This constitution "erases" the historical and societal specificities of Tunisia, such as its anchoring in the Mediterranean space, a civilizational space, so much praised and defended by the historian Fernand Braudel.

In addition, this constitution grants the president almost all powers, making him a "president responsible for everything, but accountable for nothing", even after the end of his term, with "lifetime immunity".

The legislative elections and their starving participation rate closed this "new vision",

that the Tunisians no longer understand, and that they very clearly reject.

Indeed, for all the economic players, as well as for the very active civil society, the real problems lie elsewhere.

They wonder, among other things, about the energy shift to be made, the way to manage and repay the public and external debt, the revival of a business climate paralyzed by an anachronistic administration and laws, but the only guarantee of a recovery private investment necessary for non-existent regional development.