LONDON: Tunisia was already facing widespread disaffection when it announced its third fuel price hike (5%) of the year. But following a Ramadan characterized by images of empty shelves, ordinary people are less concerned about the state of public finances and more about day-to-day survival.
Eleven years after the first of the Arab Spring revolts toppled a dictatorship and enabled Tunisians to build democracy, vote in elections and exercise the right to free speech, the dream of bread, jobs and of dignity continues to be that.
“In my opinion, everything is definitely going in the wrong direction,” Elie Abouaoun, director of the North Africa program at the American Institute for Peace, told Arab News. “Prices are rising, there is heightened concern about survival and the prospects for a new IMF deal are as distant and remote as they have ever been.”
These fuel price hikes aren’t the end either. A minister has told reporters the country will face further increases of “at least” 3% per month for the rest of 2022.
For farmers, the news will worsen an already precarious situation, after the price of barley, a staple animal feed, jumped 94% in 12 months, disregarding the impact of war in Europe.
Fuel price hikes only increased their costs and, in an effort to recoup some of the losses, farmers in several areas engaged in protests in which milk was poured into the streets, roads were blocked and threats of production cuts were made.
Seeking to assuage the prospect of further unrest, the government has announced it will raise the price of eggs, milk and poultry, but Abouaoun is worried about how this will affect the wider population.
“The problem for ordinary people is not scarcity,” Abouaoun said. “There are very few products that are not available, what they are facing is prices, which are increasing almost every day, so they must seek to identify sources of food that can be obtained at cheaper rates. Dear. To get Tunisia out of this crisis, we must focus entirely on economic and social problems. Politics should be put aside.
Tunisia has been ruled by more than eight governments since longtime President Zine El Abidine Ben Ali was overthrown in 2011. Kais Saied, the current president, was democratically elected in October 2019, but he sacked the previous government and suspended parliament against a backdrop of disenchanted politicians, high unemployment and a sluggish economy.
A retired law professor, Saied said he wanted to give Tunisia’s politics and economy a facelift. But with political and economic problems continuing to worsen, he took executive power in July 2021 and frequently reshuffled the cards. On June 7, he replaced 13 governors out of a total of 24, in addition to the four he had ousted last August.
According to experts, the way to cope with the aggravation of the economic crisis in Tunisia is through the inflow of foreign investment. Until such investments materialize, however, a multi-billion dollar package from the IMF is the only realistic bailout option. But to clinch that, Saied must do battle with the country’s largest public sector union, the Tunisian General Labor Union or UGTT.
“The next two to three months are critical,” Sarah Yerkes, senior fellow for Carnegie’s Middle East program, told Arab News. “The IMF deal is not a white knight; it will not solve all the problems on its own. But what it does do is open up other opportunities by bolstering investor confidence with the likely outcome of credit rating agencies easing. But the IMF said that for the deal to be approved, the UGTT must approve it.
However, the likelihood seems remote at present, with the UGTT threatening a nationwide strike and refusing to heed Saied’s calls for dialogue, arguing that he has excluded democratic forces and appears to be “unilaterally” determining who will participate.
On top of that, the UGTT has spent more than a decade in fierce opposition to an IMF toolkit response that demands public sector spending cuts.
Yerkes said that if the strike continues, it cannot be attributed to Saied, noting that this protest is motivated by an economic situation prior to his leadership. But she can sympathize with the hostility to the IMF’s fetishization of austerity, even as she acknowledges that Tunisia has the highest public sector payments in the world “and that’s a problem that needs to be dealt with for 11 year”.
Abouaoun accepted. “Tunisia needs to reform its public sector,” he told Arab News. “There is a list of measures, and these must be implemented, but there is a lack of courage to discuss them with the public, but without dialogue, there is no way out of the crisis.
“I’m not saying that everything the IMF asks is good, but that’s where the dialogue is useful, because you can say that we will do this but not that. When I look at the president and the UGTT, I see a complete lack of will to compromise on both sides, and there is absolutely no acknowledgment that all parties have contributed to this crisis.
Yerkes said she believed there was room for compromise, particularly within the IMF, suggesting that while a commitment to cut wages was included in the deal but not immediately implemented , he might be willing to look away, provided other conditions are adhering to.
There is speculation that any deal would include some political conditionality, including backing the UGTT and a ban on banning all other political parties.
“There have been cases of winking, nudging to cut wages, but don’t do it as long as Saied fulfills the political conditions,” Abouaoun said.
“With this threat of a UGTT strike, Saied may decide he has to take the hit, especially saying that the IMF is ready to provide a bridge loan to move the negotiations forward.”
From the outside, too, donor countries are watching Saied’s consolidation of power over the past 11 months and growing nervous. This can be seen in the US Congress’s proposal to cut aid spending on Tunisia by 50% in response to what it sees as a drift towards authoritarianism.
Abouaoun acknowledged that “some of the measures” adopted by Saied went “a bit too far”. How far he is willing to go, however, remains unknown. And now the United States and its European partners have said “inclusive progress” must be part of any bailout.
That outside pressure will certainly make him rethink whether he’s willing to go all the way and cast aside democratic legitimacy, Yerkes said.
“The next few months are going to be complicated,” she said. “The US seems more willing to push Saied with the stick but, given his proximity, the EU and European nations may be more keen to prioritize Tunisia’s economic and social stability – although they will pay attention to the constitution that Saied is drawing up.”
Abouaoun reiterated that the problems faced are not just down to one man, noting that civil society and the UGTT contributed to the imminent collapse, but he agreed that for many the priority is the “return to daily normality” and that starts with getting food prices under control.