Ghost workers sap phosphate wealth in Tunisia

Heavy machinery at a phosphate mine in Tunisia. The country’s phosphate exports have plummeted in recent years. (Reuters)
Updated 08 March 2019
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Ghost workers sap phosphate wealth in Tunisia

  • Bloated state companies put Tunisia on a collision course with international donors amid rising joblessness, social unrest

TUNIS: Tunisia’s state phosphate firm CPG pays Abdel-Basset Klifhi a salary of $280 a month, even though he spends most days in his favorite cafe in the southern town of Metlaoui.

He is one of 21,000 people taken on by the Companie des Phosphates de Gafsa (CPG) since Tunisia’s autocrat president Zine El-Abidine Ben Ali was toppled in 2011.

Since then, the economy has been in crisis and CPG has lost its spot as the country’s top exporter. Unemployment, inflation and deficits have shot up, and the value of the dinar currency has plummeted. Loans from the International Monetary Fund (IMF) have kept the government afloat.

CPG’s hiring spree brought its total workforce to about 30,000 and aimed to reduce the number of unemployed to stop protests destabilizing the transition to democracy. Thousands more are still jobless, however, and some block roads to CPG daily to demand work. Others on the payroll want pay rises and frequently go on strike.

Phosphate production has halved since 2011 and CPG’s losses have accumulated as the wage bill grew. Employees point to other inefficiencies at the company.

CPG’s declining fortunes have highlighted the government’s failure to reform the bloated state companies that dominate the economy and have put Tunisia on a collision course with international donors.

They have also deprived the government of crucial export revenues needed to turn the economy around and create real jobs to end the daily protests and unrest, which largely target CPG.

“I get 850 dinars ($279.62) a month without doing any work,” said former protester and CPG employee Abdul-Basset.

The company spends about $70 million a year of its $180 million annual budget on salaries, Industry and Energy Minister Slim Feriani said. His ministry oversees CPG.

“The hirings that took place after the revolution years were aimed at buying social peace but increased the suffering of the company,” he said. “We are aware that they are not doing anything.”

He said the company has lost almost $1 billion a year since 2011 because of disruption caused by the protests. It has only had 4,500 production days out of a possible 14,000 at its five mines since 2011, according to company documents.

“This could have prevented us from borrowing from the IMF,” said Feriani.

Phosphates accounted for about 10 percent of Tunisia’s exports before 2011, when olive oil replaced it as the top export. In 2018, phosphate had shrunk to about 4 percent.

Tunisia agreed a $2.6 billion loan with the IMF in 2016. So far four instalments worth $1.4 billion have been paid, but each one was delayed because reforms fell behind the agreed program. Public sector salaries and reform of public companies were among sticking points with the IMF.

Analysts expect a new confrontation with the lender after the government raised salaries at public companies, including CPG, state airline Tunisair, and state energy firm STEG in November.

An IMF spokeswoman said it was “in a continuous dialogue with the authorities on the policies” in the next loan review, but declined to say when it would take place. “The IMF supports the Tunisian authorities’ economic program to reduce macroeconomic imbalances, including by strengthening external competitiveness, reducing inflation, and lowering debt, and to improve job-creating growth prospects through structural reforms,” she said.

CPG’s phosphate production fell from a record 8.2 million tons in 2010 to about 3 million tons in 2018, official data showed.

In contrast, nearby Morocco raised output to 30 million tons last year from 13 million in 2010. A stable social climate allowed it to develop the industry including the use of a phosphate pipeline.

“Tunisia is no longer on the global phosphate production radar,” Feriani said.

Until 2011, Tunisia was one of the world’s top five producers, but now stands in 11th place, far behind the leaders China, the US, Morocco, Russia and Jordan.

CPG said it could raise production by between 5 and 6 million tons this year, but only if the protests stop. In 2017, President Beji Caid Essebsi ordered the army to guard phosphate sites, but has not dispersed the protests fearing a backlash.

Some staff in the company say CPG has also lost money through other inefficiencies.

At CPG’s headquarters employees showed a Reuters team dusty, unused train carriages, bought four years ago to ship phosphate to the coast.

“They have not been used because of a (technical) problem at the railway track near the production sites,” said CPG production director Rafaa Ben Nassib.

A CPG employee said that the company sometimes ordered replacement pieces for parts that were not broken.

Nassib said that this was “wrong and unfair.” Feriani said there was no proof.


Palestinians in financial crisis after Israel, US moves

Updated 22 March 2019
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Palestinians in financial crisis after Israel, US moves

  • A Ramallah-based economics professor said the Palestinian economy more generally, remain totally controlled by and reliant on Israel
  • Israeli-Palestinian peace efforts have been at a standstill since 2014

RAMALLAH, Palestinian Territories: The Palestinian Authority faces a suffocating financial crisis after deep US aid cuts and an Israeli move to withhold tax transfers, sparking fears for the stability of the West Bank.
The authority, headed by President Mahmud Abbas, announced a package of emergency measures on March 10, including halving the salaries of many civil servants.
The United States has cut more than $500 million in Palestinian aid in the last year, though only a fraction of that went directly to the PA.
The PA has decided to refuse what little US aid remains on offer for fear of civil suits under new legislation passed by Congress.
Israel has also announced it intends to deduct around $10 million a month in taxes it collects for the PA in a dispute over payments to the families of prisoners in Israeli jails.
In response, Abbas has refused to receive any funds at all, labelling the Israeli reductions theft.
That will leave his government with a monthly shortfall of around $190 million for the length of the crisis.
The money makes up more than 50 percent of the PA’s monthly revenues, with other funds coming from local taxes and foreign aid.

While the impact of the cuts is still being assessed, analysts fear it could affect the stability of the occupied West Bank.
“If the economic situation remains so difficult and the PA is unable to pay salaries and provide services, in addition to continuing (Israeli) settlement expansion it will lead to an explosion,” political analyst Jihad Harb said.
Abbas cut off relations with the US administration after President Donald Trump declared the disputed city of Jerusalem Israel’s capital in December 2017.
The right-wing Israeli government, strongly backed by the US, has since sought to squeeze Abbas.
After a deadly anti-Israeli attack last month, Prime Minister Benjamin Netanyahu said he would withhold $138 million (123 million euros) in Palestinian revenues over the course of a year.
Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through its ports, and then transfers the money to the PA.
Israel said the amount it intended to withhold was equal to what is paid by the PA to the families of prisoners, or prisoners themselves, jailed for attacks on Israelis last year.
Many Palestinians view prisoners and those killed while carrying out attacks as heroes of the fight against Israeli occupation.
Israel says the payments encourage further violence.
Abbas recently accused Netanyahu’s government of causing a “crippling economic crisis in the Palestinian Authority.”
The PA also said in January it would refuse all further US government aid for fear of lawsuits under new US legislation targeting alleged support for “terrorism.”

Finance Minister Shukri Bishara announced earlier this month he had been forced to “adopt an emergency budget that includes restricted austerity measures.”
Government employees paid over 2,000 shekels ($555) will receive only half their salaries until further notice.
Prisoner payments would continue in full, Bishara added.
Nasser Abdel Karim, a Ramallah-based economics professor, told AFP the PA, and the Palestinian economy more generally, remain totally controlled by and reliant on Israel.
The PA undertook similar financial measures in 2012 when Israel withheld taxes over Palestinian efforts to gain international recognition at the United Nations.
Abdel Karim said such crises are “repeated and disappear according to the development of the relationship between the Palestinian Authority and Israel or the countries that support (the PA).”
Israel occupied the Gaza Strip and the West Bank, including now annexed east Jerusalem in the Six-Day War of 1967 and Abbas’s government has only limited autonomy in West Bank towns and cities.
“The problem is the lack of cash,” economic journalist Jafar Sadaqa told AFP.
He said that while the PA had faced financial crises before, “this time is different because it comes as a cumulative result of political decisions taken by the United States.”
Abbas appointed longtime ally Mohammad Shtayyeh as prime minister on March 10 to head a new government to oversee the crisis.
Abdel Karim believes the crisis could worsen after an Israeli general election next month “if a more right-wing Israeli government wins.”
Netanyahu’s outgoing government is already regarded as the most right-wing in Israel’s history but on April 9 parties even further to the right have a realistic chance of winning seats in parliament for the first time.
Israeli-Palestinian peace efforts have been at a standstill since 2014, when a drive for a deal by the administration of President Barack Obama collapsed in the face of persistent Israeli settlement expansion in the West Bank.