Tunisia: An economy drowning in debt

A vendor displays snails at a market in downtown Tunis, Tunisia. (Reuters)
Updated 31 January 2018

Tunisia: An economy drowning in debt

TUNIS: Tunisia was widely hailed as the only democratic success story to emerge from the Arab Spring uprisings of 2011. Today, the country is drowning in public and personal debt, and social turmoil.
According to official figures from the Finance Ministry, the budget deficit now stands at $2.2 billion.
State debt now accounts for 71 percent of the country’s gross domestic product (GDP), up from 41 percent in 2010, when the deficit was 650 million dinars ($272.5 million).
At a time when the global economy is growing faster than it has for a decade, Tunisia’s growth languishes at 2.3 percent, well below the 5.6 percent average achieved in the Arab world 10 years ago.
The International Monetary Fund (IMF) insisted that Tunisia implement controversial reforms before receiving the next tranche of a $2.9-billion loan that was negotiated in 2016 with a view to stimulating economic growth and job creation.
The new fiscal measures raised taxes on a wide range of everyday goods, increased levies on some imported goods, and added a percentage point to the value-added tax (VAT).
With state social security funds $1 billion in the red, Parliament also approved a new 1 percent social security tax on employees and companies.
Speaking on Tuesday in Marrakech, IMF chief Christine Lagarde said the reforms are necessary.
“The IMF understands the frustrations of the Tunisian people, who have not yet felt the full economic benefits of their country’s political transformation,” she said. “This process is difficult and takes time.”
Lagarde also urged Arab governments to urgently create jobs. Unemployment in Tunisia among young people is estimated at 30 percent.
Ahmed Sassi a member of the secretariat for the UDC, the union for unemployed graduates, said Tunisia has been blighted by successive governments following a flawed economic model and “self-destructive” policies.
“The model we have for development is increasing the disparity between the rich north, and the south and interior of the country,” he told Arab News.
For example, at the height of the orange season, farmers face great problems in distributing and exporting their produce.
Sassi also pointed to “missed opportunities” to develop markets for Tunisia’s wheat cultivation and flowers for essential oils for the perfume industry, and to capitalize on the country’s strength in the olive oil market.
He also criticized the lack of “audacity and courage” regarding technologically innovative projects, such as a solar-energy farm in the south.
Meanwhile, when negotiations with PayPal fell through last May, young digital entrepreneurs were left in the lurch because they could not make international payments online.
For big donors such as the EU and the World Bank, Tunisia’s rampant corruption continues to put off investors.
Prime Minister Youssef Chahed was elected on an anti-corruption platform, but has achieved little in practice.
The head of the National Anti-Corruption Authority, Chawki Tabib, has estimated that corrupt transactions cost Tunisia $840 million a year, a sum that would almost halve the national deficit if it were put back into the economy.


Pan-Arab poll: Biden better for region, but must shun Obama policies

Updated 26 October 2020

Pan-Arab poll: Biden better for region, but must shun Obama policies

  • Majority of respondents to Arab News/YouGov survey consider neither candidate good for region
  • Findings show strong Arab support for Trump on Iran but not on Jerusalem embassy move

RIYADH: Nearly half the respondents in an Arab News/YouGov poll conducted in 18 Middle East and Africa (MENA) countries believe neither candidate in the upcoming US elections will necessarily be good for the region.
Of the rest, 40 percent said Democratic Party candidate Joe Biden would be better for the region while 12 percent said the same thing about incumbent President Donald Trump. But a key takeaway of the poll is that if Biden, who served as vice president to Barack Obama until 2017, wins the White House race, he would be well advised to shed the Obama administration baggage.
When asked about policies implemented in the Middle East under the Obama administration, the most popular response (53 percent) was that the Democratic president left the region worse off, with another 58 percent saying Biden should distance himself from Obama-era policies.
The study surveyed a sample of 3,097 respondents online to find out how people in the MENA region feel about the Nov. 3 US elections.

Opinion

This section contains relevant reference points, placed in (Opinion field)

Containing Iran was found to be one of the top four issues that respondents wanted the next US president to focus on. Strong support for Trump both maintaining a war posture against Iran and imposing strict sanctions against the Tehran regime was noticed in Iraq (53 percent), Lebanon (38 percent) and Yemen (54 percent), three countries that have had intimate regional dealings with Iran.
President Trump’s 2017 decision to move the US Embassy in Israel to Jerusalem proved overwhelmingly unpopular, with 89 percent of Arabs opposing it. Surprisingly, in contrast to most other Arabs, Palestinian respondents inside the Palestinian Territories indicated a greater desire for the US to play a bigger role in mediation with Israel.
Arab opinion was largely split on the elimination this year of Iran’s regional “satrap” Gen. Qassem Soleimani, with the single largest proportion of respondents from Iraq (57 percent) and Lebanon (41 percent) seeing it as a positive move, as opposed to those in Syria and Qatar, where most respondents — respectively 57 percent and 62 percent — saw it as negative for the region.

Iran also figured in the list of perceived threats to US interests, although well behind white nationalism (32 percent) and China (22 percent). The other critical challenges for the US as viewed by Arabs were cybercrime, radical Islamic terrorism and climate change.
For a country that touts itself as an ally of the US, public attitudes in Qatar were found to be surprisingly out of sync with US objectives in the Middle East. The perception of radical Islamic terrorism, Iran and Islamist parties as the “three biggest threats facing the region” was much softer in Qatar compared with the region as a whole.
It came as little surprise that three quarters of respondents want the next US administration to make it easier for people from Arab countries to travel to the US. The figure for Lebanon, for instance, was even higher, 79 percent, underscoring concerns that many young Arabs are actively trying to leave the region.
Among other findings, Arabs remain overwhelmingly concerned about such challenges as failed government (66 percent) and the economic slowdown (43 percent).
Close to half of the respondents (44 percent) would like to see the next US president focus on empowering young people in the Arab region and solving the Arab-Israeli conflict (44 percent), followed by containing COVID-19 (37 percent), reining in Iran and Hezbollah (24 percent), quashing radical Islamic terrorism (24 percent) and tackling climate change (17 percent).