between an uncertain present and an unknown future

Photo: World Bank

Rise and Fall! Courted and dubbed yesterday by the markets, today rejected on the benches of failed nations. Tunisia does not deserve such an insult. In just over ten years, she endured tremendous hardships and the worst humiliations.

The land has drunk the cup to the bottom. Once awarded its investment-grade status, Tunisia has been ranked as a high-risk country in a decade. It no longer inspires confidence and even more mistrust because it is regularly sanctioned by the rating agencies, who have relegated it to the bottom of the ladder, not far from the pariah countries.

In the wake of the revolution, we were far from envisioning that the conquest of freedoms would turn into an economic and financial disaster. The state, devastated by political squabbles and the union uprising, is struggling to revive production. It is reduced to international begging, the boundaries of which are quickly becoming apparent.

Necessity is law: we must bend our backs and dare to knock on the doors of the IMF, a necessary step to avoid the indifference, if not the animosity of the markets. The problem is that appealing to the IMF offers no real way out of the crisis. Both of our foundations have been seriously and irreparably changed.

“The land has drunk the cup to the bottom. Once awarded its investment-grade status, it ranks high-risk country in ten years.

The slow growth at the end of the health crisis – in contrast to the recovery of the world economy – exacerbated today by the shock wave of the war in Ukraine, has added to the misdeeds and damage caused by the chaotic management of the economy and public finances .

Therefore, the injection of foreign capital in the form of new loans is unlikely to stimulate investment and innovation. It is without real support for companies. In addition to raising the bar energetically and immediately launching the necessary structural reforms. There is only for the current expenditure of the state, in spite of the public investment of the future.

The share of civil service salaries is above all ceilings, at almost 45% of the budget and more than 16% of GDP. At best, it is a state scandal, at worst a crime that has already affected young people and future generations.

In the absence of strong and sustainable growth to reduce the weight of an unsustainable debt, it is necessary to borrow to repay previous credits. The accumulation of debt service and wages is weighing on the state budget, which is given more room for maneuver due to the explosion in subsidy expenditure.

“The share of pay in the Civil Service is bursting at almost 45% of the budget and more than 16% of GDP by all limits”

In other times we would have had the right to go through the IMF box – that is its mission – without having to answer for our inability to bring more rationality and rigor to our way of governance. Nor that it is necessary to bring order to the Tunisian house as quickly as possible, which is creaking and tottering on its broken foundations everywhere.

The officials responsible for the negotiations with the IMF are not doing a good job. They evolve, despite their determination, in a territory plowed by the more than once broken promises of their predecessors.

Since then, the situation has seriously deteriorated. Shortages have increased and exceeded their alarm threshold. Prices have risen, as have our illusions. Investments are close to zero, saving is a thing of the past and the specter of bankruptcy and default haunts everyone’s mind.

The country, more divided than ever, is sinking into a global and multifaceted crisis, the outcome of which we do not see. The constitutional vacuum, political confrontation and hardening of the unions threaten to ignite the powder.

Stagflation has set in for a long time, without its damaging effects on the social divide calming the enthusiasm of the unions, more determined than ever to give in nothing, at the risk of adding fuel to the fire. They claim, in these times of scarcity, general unemployment, lack of funding sources, more than rights, privileges that the state cannot and should not grant them. Except to create a spiral of inflation that would wipe out everything in its path.

“The country, more divided than ever, is sinking into a global and multifaceted crisis, the outcome of which we do not see”

Hached’s heirs must remember and rediscover their foundations. Far from them: the temptation to put the last nail in the coffin of the economy and the social pact.

Our envoys in Washington, on the occasion of the spring meeting of the IMF and the World Bank, the Minister of Economy and Planning and the Governor of the BCT, supported remotely by the Secretary of the Treasury, have made an effort to convince them of their determination to take action on the structural reforms demanded by their interlocutors.

Most frustratingly, they would have done well without it, as they claim paternity convinced they are of the need for these reforms. The irony is that the deal with the IMF – if there is one – would primarily benefit those who stubbornly refuse to agree on the latter’s terms, but are in fact in line with our public and sectoral policies that we talk about so little. The gentlemen of the IMF do not say anything other than what we have said and justified in every way.

In this case, Tunisia is asking at most $4 billion, not enough to cover all of our financing needs and barely enough to temporarily ease civil servant and consumer support wage costs.

There are times when union votes, without being denied by the central government, demand wages to be paid on time, including bonuses, while refusing all structural reforms and transformations of state-owned enterprises, often causing scandal.

“The irony is that the deal with the IMF – if there is one – would primarily benefit those who persist in refusing an agreement…”

Can we be allowed, at the risk of hurting our collective conscience, not fulfilling our responsibilities, not stopping the bleeding of public finances, not ending the degeneration of a few state-owned enterprises with a suicidal mode of governance?

The state itself, hypertrophic to the point of paralysis, is not free from blame. It must reform and regain a sense of efficiency and economic rationality. In either case, the role of the state and the notion of public service are at stake. A state strategist and service provider or manufacturer of annuities. To believe that the retirees are not the ones being sued! The army of officials is said to be the main source of the decline in… purchasing power.

Overdrafts, pending new external lending prospects in the event of an IMF deal, will not prepare the country for a brighter future, in the absence of productivity and output recovery. We have to choose between investment and consumption, between imports and exports, between a strong dinar and a weak currency, like the country. Choosing between the uncertain present and the unknown future.

From this choice arises doubt, resignation and decline or, on the contrary, ambition, willpower and determination for a beneficial recovery. Our independence, our sovereignty and our dignity depend on it.

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