Tunisia’s PM decides against relying on more external debt, will freeze salaries

Tunisia’s Prime Minister Elyes Fakhfakh risks sparking protests by freezing increases in the wages of public employees because of the critical state of public finances. (AAFP file photo). (AFP file photo)
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Updated 15 June 2020

Tunisia’s PM decides against relying on more external debt, will freeze salaries

  • Tunisia expects the economy to shrink by up to 4.3% this year, the steepest drop since independence in 1956

TUNIS: Tunisian Prime Minister Elyes Fakhfakh said on Sunday he had decided against the use of more external debt and that all new expenses that arise for the country would be funded only through internal loans.
He said that he will freeze increases in the wages of public employees because of the critical state of public finances which was worsened by the coronavirus crisis.
This move could spark a conflict with the powerful UGTT Union, which is expected to reject the decision, and could lead to protests and strikes.
Tunisia needs an additional 4.5 billion dinars ($1.6 billion) of loans because of the coronavirus crisis, and the government will seek it from the local market, he added.
“External debt reached dangerous levels and now reached 60% of GDP, compared to 30% in 2013 and I decided not to continue in this way,” Fakhfakh said in interview with Attessia TV.
Tunisia expects the economy to shrink by up to 4.3% this year, the steepest drop since independence in 1956.
Tourism revenues fell by about 50% in the first five months of this year compared to the same period in 2019, as western tourists deserted Tunisia’s hotels and resorts.
“Public finances are very critical and we cannot continue with the approach of increasing wages,” Fakhfakh said.
If the situation continues as it is, the government could be forced to reduce wages, he added.
Tunisia is under pressure from the international lenders to freeze public sector wages — the bill for which doubled to more than 17 billion dinars in 2020 from 7.6 billion in 2010 — as part of measures to reduce its budget deficit.
But the UGTT says the monthly average wage of about $250 is one of the lowest in the world, with high inflation rates which reached 6.3 percent in May.


Displaced Yazidis head back to Sinjar as lockdown bites

Gole Zeblo Ismaeel, daughter in-law of Nayef al-Hamo, a Yazidi displaced man, hugs her neigbour before heading back to Sinjar following the outbreak of the coronavirus disease (COVID-19) and economic crisis, near Dohuk, Iraq July 4, 2020. (REUTERS)
Updated 39 min 54 sec ago

Displaced Yazidis head back to Sinjar as lockdown bites

  • Young men from my community who used to earn up to $17 a day working at restaurants and factories can no longer find work because of the lockdown’s impact on the economy

SHARYA: Hundreds of Yazidi families driven from their hometown of Sinjar in northern Iraq years ago are now returning as the impact of coronavirus lockdown measures makes their lives in exile even harder.
Many have lost their jobs and aid from donors in Sharya, where they have been living since they fled Sinjar in 2014.
Mahma Khalil, the mayor of Sinjar but now in exile in Dohuk in Iraq’s Kurdistan region, said more than 1,200 displaced families have returned from their temporary homes to Sinjar since June. Most had relatives their who serve in the military or police, he said.
Overrun by Daesh in 2014 and liberated by an array of forces the following year, little has been rebuilt in Sinjar.
Water is scarce and power intermittent in the city, whose former occupiers killed thousands of Yazidis and forced many women in sexual slavery.
Despite the devastation that makes the city still largely unfit for habitation, members of this ancient minority feel they have no other choice.
“The situation has become really bad,” Yazidi community leader Jameel Elias Hassan Al-Hamo said outside his makeshift home in Sharya, just south of Dohuk.
Young men from his community who used to earn up to $17 a day working at restaurants and factories can no longer find work because of the lockdown’s impact on the economy, Al-Hamo said.
As he spoke, men carried pieces of furniture, blankets and bags of food out of his home and piled them onto the back of a pickup truck.
The coronavirus outbreak has worsened Iraq’s economic crisis, pushing oil prices down in a country that depends on crude export for more than 90 percent of its revenue. Restrictions on travel and curfews have driven many out of work.
Al-Hamo’s daughter-in-law Gole Zeblo Ismaeel said that the monthly aid packages they used to depend on became scarcer as the crisis impacted the work of humanitarian organizations.
Another reason for their return was the restriction on internal travel between semi-autonomous Kurdistan and neighboring Iraqi regions, imposed since March to curb the spread of the virus.
Al-Hamo said that most Yazidi families in Sharya have a son enrolled in armed forces stationed in Sinjar, who have been unable to visit for weeks.
“Some haven’t seen their families for over three months now,” he said.
Although their hometown is destroyed, Al-Hamo said they have been promised support by local aid organizations upon their return and he believed soon he will be reunited with the rest of his family soon.
“I registered over 400 names and phone numbers of relatives, members of the tribe and of the community. They said that once we, the sheikhs and tribal leaders, go back, they will follow us,” he added.
Khalil said he has been pleading for funds from the central government to step up reconstruction efforts in Sinjar but he believed it would not happen any time soon.