#LeMonde: “In Tunisia, the economic and social crisis drags on “

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The tax increases of 2018 set fire to the dust in a country where inflation is high and where 30% of young people are unemployed.

                                    

 Demonstration, in Tunis on January 12, against the rise of VAT and the introduction of taxes on basic food products. "Title =" SOFIENE HAMDAOUI / AFP "onload =" lmd.pic ( this) "onerror =" lmd.pic (this); "class =" lazy-retina "/> 
 
<figcaption class= Demonstration, in Tunis on January 12th, against the rise of the VAT and the setting up of taxes on basic foods
         Credits: SOFIENE HAMDAOUI / AFP
    

Demonstrations, arrests, clashes: the protest broke out in Tunisia in January, following the vote of the 2018 Finance Act. "People felt impoverished but could not appoint any responsible. The budget was a trigger "says Michaël Ayari, specialist of Tunisia at the International Crisis Group (ICG), a research center.

Adopted on December 9, 2017 by the Assembly of People's Representatives, the law provides for a one-point VAT increase, but also tax increases on certain essential products. The general increase in taxation comes in a context already marked by galloping inflation (6%), which has eroded the purchasing power of Tunisians, and by a very high unemployment rate (30% among young people). Seven years after the revolution, "the country has failed to propose a new model of development" summarizes Michael Ayari.

The economic situation has continued to deteriorate. "The activity is weak, the employment is low, the social tensions persist, the composition of the expenditure has deteriorated, and the external imbalances are pronounced" listed the International Monetary Fund (IMF) in one of his last reports (May 2016). Social instability and the terrorist threat have hit the tourism and extractive industries hard, discouraging investment, while the informal economy – which is not subject to taxation – has exploded. The budget deficit stands at 6% of GDP, public debt at 70% of GDP, growth stagnates at around 2% while the trade deficit has reached a record level.

Competition from Asia

In 2010, on the eve of the uprising against the dictatorship of Ben Ali, the country is economically stable, even hailed as a "good student" by international institutions and foreign partners. The growth of the regime is then ensured by tourism, phosphates, textiles, but also the mechanical and electrical industries. The country enjoys a good level of foreign direct investment (FDI), and also has money transfers from Tunisians working abroad. The backside of the decor is less shiny. "In reality, the economy weakened as early as 2008 [le début de la crise en Europe, son principal partenaire] recalls the economist Radhi Meddeb, who continues: Especially, the growth was of poor quality , very unequal and not job-creating. "

The economic policy developed from the 1990s is that of cheap labor to make Tunisia competitive in exports, mainly in textiles – even if, from the 2000s, it competition from other countries, which have become cheaper, particularly in Asia. The model works because it is driven by authoritarian power. The Tunisian General Union of Labor (UGTT), the trade union center, provides workers with some increases and keeps the system in order. "But such an operation is possible only in the context of a hard regime" stresses Michaël Ayari.

With the revolution, speech is free, even within companies. Workers no longer accept the conditions that are made to them. Strikes are on the rise, as are sit-ins to get jobs for civil servants. But where the Bengali state responded to claims by repression, the governments post-2011 will " buy the social peace: the state hired massively", recalls the analyst ICG. The payroll of the civil service goes from 7 billion dinars (2,35 billion euros) in 2010 to 15 billion in 2018.

Bureaucratic heaviness

The state also has to cope with the growing debt burden with banks and foreign partners, and finance an expensive commodity subsidy system. The Tunisian debt climbs and the currency, the dinar, loses its value for several years (- 20% in 2017 against the euro). Main consequence: Tunis has less money to finance development projects, especially in isolated, historically marginalized interior regions and on the front lines of disputes. Foreign direct investment (FDI) flows have fallen by more than 40% since 2012.

One of the obstacles to economic dynamism lies in the heaviness of the bureaucracy. Tunisia remains a closed economy, administrative authorizations are difficult to obtain, as is access to finance for SMEs. "Changing the model involves changing the conditions of production and distribution of wealth. Any reform has winners and losers. Today, potential losers are those who benefited from the previous system. They are powerful and very mobilized ", analyzes the economist Radhi Meddeb.

The head of government, Youssef Chahed, appointed in August 2016, was perceived rather positively in its infancy. For example, it launched a major anti-corruption operation. But his room for maneuver seems limited. The IMF, which granted a new tranche of aid of $ 314.4 million (€ 257.7 million) in June 2017, in return calls for a number of reforms to reduce spending. Mr. Chahed is particularly facing strong political pressure. Tunisia is led by a coalition of two major rival parties, Nidaa Tounes (called "modernist") and Ennahda (Islamist). This consensus strategy allowed the country to move forward in its process of democratization, but not to meet the economic requirements expressed in 2011. " The economy is not only technical, it is arbitration serving a political vision. How could two such different parties agree on a program? questions Mr. Meddeb.

            

DW Africa: Image et Content. Follow the original article on the DW here.

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