Tunisia: unemployment, inflation, debt … Najla Bouden at the bedside of the economy

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As Tunisia confronted a long crisis, trained geologist Najla Bouden was tasked with establishing a new government. In her Facebook account, she promised her “to face the financial difficulties of the country and work towards the formation of a homogeneous government to combat corruption.” The business community is still waiting. In particular, Mr. Bowden has no financial skills and became the head of government with reduced privileges under the “exceptional measures” proclaimed by the head of state to formalize the full power he assumed on July 25. Will be.

The priority of the priorities is “the government must resume negotiations with the IMF to find funding,” said economist Mosen Hassan. The crisis in Tunisia, characterized by 10 years of half-mast growth (+ 0.6% per annum on average) and high inflation (6% per annum), was exacerbated by Covid’s pandemic, which is endangering the country. It robbed important tourism revenues (up to 14% of GDP, about 400,000 jobs are at stake). Therefore, GDP plunged 8.8% in 2020, but this decline should be barely offset by half in 2021. World Bank forecasts + 4% growth.

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To get out of the rut, Tunisia wants to fund the International Monetary Fund (IMF) for the first time in 10 years, with a loan of € 3.3 billion, especially alongside aid received from the European Union. .. But negotiations have been stalled since Mr. Saeed’s coup. “Unfortunately, the economy is paying the price of political instability-nine governments in 10 years-and paying the price of ignorance of the political class on the economic side,” added former trade minister Hassan. rice field.

The unemployment rate has risen from 15% before the pandemic to nearly 18%, with a higher proportion of women and young people. One-fifth of the 12 million inhabitants are considered poor or vulnerable (living up to $ 5.5 a day), which has spurred protests. Authorities had to increase debt, which is already approaching 80% of GDP, to pay the army of civil servants (14% of the active population), further inflating the budget deficit (more than 10%).

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Hassan believes the situation is so serious that he needs to “declare an economic emergency” and has not announced any action in this area, except for Sayed’s promise to end corruption. I am concerned about that. “There are no serious prospects in the short term, and trust among business people continues to decline, losing many foreign partners,” he laments.

Entrepreneur Mehdi Bhouri, a former macroeconomicist at the Central Bank of Tunisia, is afraid to bear the brunt of this dissatisfaction. Bhouri was launched three years ago. This is a start-up for culturing microalgae extracted with astaxanthin, which is used as an antioxidant, anti-aging and antioxidant against hypertension. He sought foreign investors to move to large-scale production, but the “ambiguity that dominates Tunisia” fears that these partnerships will decline.

“A clearer horizon allows us to get the final funding contract and start the industrial phase of the project very quickly,” he said. “We accept and understand the current exceptional situation.” But Bhouri wonders, “How long will it last?” Tarak Cherif, chairman of the young entrepreneur Conect Employers’ Confederation, wants the state to “work swiftly, offer us courses and strive to establish a government to follow key issues.”

In his eyes, it is imperative to regain investor confidence in order to “get out of this complex situation.” Tunisia needs to face a deadline soon. To complete this year’s budget, we will have to repay € 4.5 billion this year and need a budget extension of € 5.7 billion.

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