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)


Amnesty slams Iranian execution of two men charged of financial crimes

Updated 28 min 19 sec ago
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Amnesty slams Iranian execution of two men charged of financial crimes

LONDON: After two men convicted of financial crimes were executed in Iran, Amnesty International has strongly criticized the Iranian regime.
Vahid Mazloumin and Mohammad Esmail Ghasemi were put to death after a trial Amnesty has called “grossly unfair.”
Amnesty International’s Middle East and North Africa Research and Advocacy Director, Philip Luther, said of the case: “With these abhorrent executions the Iranian authorities have flagrantly violated international law and once again displayed their shameless disregard for the right to life.
“Use of the death penalty is appalling under any circumstances but it is even more horrific given that these men were convicted after a grossly unfair show trial that was broadcast on state television. Under international human rights law, the death penalty is absolutely forbidden for non-lethal crimes, such as financial corruption.
“The shocking manner in which their trial was fast-tracked through Iran’s judicial system without allowing them the chance of a proper appeal is yet another example of the brazen disregard the Iranian authorities have for defendants’ basic due process rights.”
The duo were executed after being charged with “manipulating coin and hard currency markets through illegal and unauthorized deals” as well as smuggling. An unspecified number of other accomplices went to prison.
Iran detained Mazloumin, 58, in July for hoarding two tons of gold coins.
With Iran in the grip of a deepening economic crisis, authorities have carried out mass arrests of individuals whom they accuse of being “financially corrupt” and “saboteurs of the economy.”
According to Amnesty, the pair were convicted and sentenced to flogging, lengthy prison terms and eventually the death penalty after “grossly unfair summary trials.”
In August, Iran’s Supreme Leader approved a request by the Head of Judiciary to set up special courts to deal with crimes involving financial corruption. Since then, these courts have sentenced several people to death.
In a statement, Amnesty said the trials were unfair because defendants were denied access to lawyers of their own choosing, had no right to appeal against sentences of imprisonment during the process and were given only 10 days within which to appeal death sentences.