Tunisia – Analysts: Saied must sidestep unions as he seeks IMF bailout
Location: Tunis, Tunisia
Source: A24 Tunisia
Restriction: A24 subscribers
Tunisian economic analysts say the new powers given to President Kais Saied allow him some room to stabilize public sector wages.
Others question if he can control the traditionally strong union workforce as the country works to secure a new $4 billion IMF loan.
An agreement to secure these funds is key to ensuring continued food imports even as the administration works to reduce subsidies.
Analyst Tarek Saidi told A24 that the international community still wants to support Tunisia. He thinks the constitutional referendum will help achieve the political stability needed for the IMF to proceed.
While wealthier Tunisians tend to blame the economic decline over the past decade on the parties governing since the 2011 revolution, union activists say they are the only force able to protect the purchasing power of citizens.
- Soundbite (Moez Hadidan – economist):
“Fitch-Rating Agency says that the new constitution gave greater legislative powers to the head of state, meaning that economic reform would be more flexible, especially that the International Monetary Fund will address only one party, the government, which is under the command of the President of the Republic. Secondly, the Tunisian Labor Union opposed some reforms, and by voting yes on this constitution, the President of the Republic indirectly derives greater popularity. So July 19 is the real start of the official negotiations between Tunisia and the IMF. The next stages will include the continuation of consultation between the government and the Fund on the economic reforms schedule. At the same time, these reforms will be opposed, especially those related to the mass of wages in the public sector from the gross domestic product, and those related to the reform of public companies.
Soundbite (Tarek Saidi – economic journalist for the Tunisian Labor Union newspaper):
“The referendum on the constitution may lead to political stability, which is important. As for dealing with the International Monetary Fund and the possibility of reaching an agreement, in my opinion, the economic conditions and indicators are stable and there is nothing new to mention on the economic level. We may work towards reaching an agreement, given that the international community still wants to support Tunisia. This is what is shown by the statements of the International Monetary Fund or other donor institutions, which seek to support the Tunisian experience as a democratic model in the Arab world.”
- Soundbite (Najm El-Din El-Akari, editor-in-chief of a Tunisian newspaper):
“It seems that in the coming days, and as I expect before the end of this year, the first installment of this loan requested by Tunisia will be released, especially with a slight improvement in the local economic situation, with regard to phosphates and tourism. Also, this initial political stability will lead to governmental and social stability, as there are negotiations with the trade union to increase the wages of public sector and public service employees. The fund will not seek the approval of the Tunisian General Labor Union on this matter, making the process more flexible. Although previous governments said that the great pressure from the union prevented them from implementing reforms suggested by the IMF.
- Soundbite (Jannat Bin Abdullah – Economic Analyst):
“Before the referendum, people feared that political instability would affect the ongoing negotiations with the International Monetary Fund. These fears did not disappear, and they still exist after the referendum because the political aspect is still unstable amid the absence of an elected parliament and institutions of the Republic. The Tunisian Labor union is key in the political, economic, and social issues. We stress that the ongoing negotiations with the International Monetary Fund are taking place with the Tunisian government and that the Tunisian General Labor Union has nothing to do with these negotiations. However, given that the reform program will affect society as it aims to not raise wages and cut subsidies, all of which affects the purchasing power of citizens, which is rejected by the General Union Tunisian Labor. Even after the referendum, the union continues to refuse these decisions. Fitch agency’s claims that the Fund will lend Tunisia without the approval of the General Union come to infleuence Tunisian public opinion and claim that economic conditions are worsening. The constitution has nothing to do with the success of negotiations or not.”