Tunisia to raise fuel prices, hold off public wages increases

A gas station attendant pumps fuel into a customer’s car at a gas station in Tunis, Tunisia. (Reuters)
Updated 02 June 2018
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Tunisia to raise fuel prices, hold off public wages increases

TUNIS: Tunisia will raise fuel prices in the coming days but hold off increasing public wages this year to meet terms of the International Monetary Fund for its next loan tranche, a government official and diplomatic sources told Reuters.
Tunisia has dropped into a deep economic slump following the overthrow in 2011 of autocratic leader Zine El-Abidine Ben Ali.
Although its successful democratic transition since then contrasts with other “Arab Spring” countries, nine governments have failed to cut the budget deficit and revive an economy hit by a lack of investment and militant attacks on tourists.
Loan talks have been complicated by a row inside the ruling coalition of secularists and moderate Islamists — over the extent of reforms and a possible cabinet reshuffle — that coincided with a visit this week from an IMF delegation.
The new austerity measures are likely to meet resistance from the powerful labor union UGTT and people tired of austerity, galloping inflation and political instability.
Tunisia agreed with the IMF in December 2016 on a loan program worth around $2.8 billion to overhaul its ailing economy with steps to cut chronic deficits and trim bloated public services, but progress has been slow.
The IMF delegation visited Tunisia this week to review with officials the next tranche worth around $250 million which, if approved, would bring total payments since 2016 to $1.2 billion.
The government official said fuel prices would rise by 0.070 dinar ($0.027) a liter in the coming days, the third hike this year but less than the 0.100 dinar the IMF had asked for, as the government has whittled down subsidies on imported fuel.
For 2018, Tunisia had budgeted 1.5 billion dinars in subsidies but with a recent rise in global oil prices it would have to spend 4 billion to avoid a rise in pump prices, he said.
“The IMF is demanding that the (fuel price) increase in all 2018 be about 0.500 dinar, but we want the adjustment to be acceptable to curb inflation,” the official said.
To appease donors, Tunisia also wants to delay a public salary increase considered for 2018 until next year though this needs to be negotiated with the labor unions, he added.
The North African country also plans to sell Eurobonds worth $1 billion over the next two weeks to help fund the budget, the official said.
IMPATIENCE
Western governments, worried about high unemployment driving Tunisians into illegal migration or militancy, have strongly backed Tunis during the post 2011-transition even without much evidence of progress on economic reforms.
But in a sign of increasing donor impatience, diplomats said, the United States abstained when the IMF voted to approve the most recent loan tranche.
The government has been trying to cut the public sector wage bill to 12.5 percent of GDP in 2020 from 15 percent — one of the world’s highest — by offering voluntary redundancies. But few have taken up the offer due to high unemployment.
The UGTT union, the political kingmaker in Tunis, has rejected plans to dismiss public servants and sell loss-making state firms.
To avoid layoffs the government increased taxes and duties at the start of the year, hitting banks and other sectors and triggering two weeks of riots.
On Tuesday Prime Minister Youssef Chahed said the president’s son had destroyed the ruling Nidaa Tounes party, of which Chahed is also a member.
The president’s son, Hafedh Caid Essebsi, who is the leader of Nidaa Tounes, had called for Chahed’s dismissal because of his government’s failure to revive the economy. But the moderate Islamist party Ennahda, Nidaa Tounes’ coalition partner, backed Chahed. ($1 = 2.5921 Tunisian dinars)


Palestine, Egypt offer air support as Israel battles wildfires

A firefighting aircraft flies over a forest near Kibbutz Harel, which was damaged by wildfires during a record heatwave, in Israel May 24, 2019. (REUTERS)
Updated 25 May 2019
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Palestine, Egypt offer air support as Israel battles wildfires

  • Thousands of people were evacuated from their homes on Thursday as fires raged
  • The fires were fueled by high temperatures and dry condition

JERUSALEM: Egypt and four European countries sent aircraft to help Israel battle wildfires that have forced the evacuation of some small towns, Prime Minister Benjamin Netanyahu said on Friday, as a record heatwave looked set to worsen conditions.
At an emergency briefing, Prime Minister Benjamin Netanyahu said Israel had appealed for international help to combat the fires, and that firefighting planes were coming in from Greece, Croatia, Italy and Cyprus.
Egypt, on the orders of President Abdel-Fatah El-Sisi, had also sent two helicopters to assist Israel, Netanyahu told reporters.
The Palestinian Authority and Russia had also offered help, Netanyahu said.
Israel braced for wildfires on Friday amid a major heat wave that shows no signs of abating.
Israel “really appreciates” the help, Netanyahu said, singling out El-Sisi for sending aid.
“I am deeply thankful for the readiness of neighbors to help us in a time of crisis, just as we help them,” Netanyahu said.
Israel’s Fire and Rescue Service said blazes in a key corridor between Jerusalem and Tel Aviv were mostly under control but difficult weather remained a conflagration risk.
“As of this moment, this (containment) is being done in the best possible way, but the challenge is yet ahead of us given the weather conditions, the winds and the extreme heat,” Netanyahu said.
Some 3,500 residents of small towns in the path of the fires were evacuated on Thursday, officials said. Dozens of homes have burned down.

Evacuations
Thousands of people were evacuated from towns and dozens of homes were burned on Thursday as fires raged, fueled by high temperatures and dry conditions. Over 500 acres of woodland have burned, said Nitai Zecharya, an Israeli official from the Jewish National Fund, known for planting forests in the country.
Zecharya said that while firefighters had brought most of the blaze under control, officials remained “very stressed” about strong winds fanning flames and “spreading fires to other fronts.”
The cause of the fires remains unclear, but they erupted following the Jewish festival of Lag Ba’Omer, which observers mark with bonfires.
A sweltering heat wave is pushing temperatures in parts of the country up to 110 degrees Fahrenheit, or 43 Celsius.