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Internacionals CIDOB CIDOB • Barcelona Centre for International for Affairs Centre CIDOB • Barcelona ISSN: 2013-4428 B-8439-2012 D.L.: notes internacionals CIDOB IDENTITY CONFRONTATIONS WILL 49 NOT CREATE NEW JOBS IN TUNISIA MARCH 2012 Francis Ghilès Senior Research Fellow, CIDOB he toppling of General Ben Ali just over a year ago coalition, the Congrès pour la République - headed by the new was accompanied by only short lived violence and president of Tunisia Moncef Marzouki, whose powers are es- no foreign intervention: the Tunisian uprising was sentially symbolic and the Forum Démocratique pour le Travail Tfollowed by democratic elections last October 23rd which et les Libertés - headed by Mustafa Ben Jaffar who chairs the brought to power a coalition government whose brief was Constitutional Assembly. to draft a new constitution within twelve months. An The momentous events of interim government headed A 1,85% decline in Gross Domestic Product and a big fall in tourist 2011 generated huge ex- receipts is not a very large price to pay for the freedom to speak and by the veteran politician Beji vote after 23 years of increasingly corrupt rule by Ben Ali. pectations for the 10.5m in- Caid Essebsi made a good habitants of North Africa’s job of keeping the ship of International financial aid for Tunisia was enough to help the country smallest country whose through a turbulent year which saw strikes and absenteeism in the state afloat in the difficult public sector weaken the control of the state and a sharp fall in the population is relatively well months that followed the re- production of phosphates, a major foreign income earner. educated and whose women volt and ensuring a free vote. enjoy rights none of their The Islamist party En Nahda The Central Bank has played a key role in stabilising the country’s Arab sisters do thanks to the economy which was also negatively affected by the fighting in Libya. won a plurality of votes Code du Statut Personnel et and very much dominates Free elections and the advent of a En Nahda party dominated govern- de la Famille enacted in 1956 the new government which ment have so far led to a rise in identity politics which do little to ad- by the founder of modern came into office two months dress the growing gap between an impoverished western and south- Tunisia, Habib Bourguiba. ern hinterland and a much richer and better educated coastal region. ago. The cabinet headed by The young people who led Hamadi Jebali includes 51 Tunisia’s hard won status as a reliable exporter of high value added the uprising and suffered the ministers and secretaries of products in the mechanical and electronic sector is being eroded. worst casualties came from state, four fifths of whom the poorer west of Tunisia Unless it addresses these challenges head on, the new government are En Nahda appointees. led by Hamadi Jebali will quickly come to appreciate that identity where unemployment rates The other ministers belong confrontations divide Tunisia and will hasten the exit of foreign com- among the young can reach to the minor partners in the panies which to date has been limited to 170. fifty per cent – they hoped notes internacionals CIDOB 49 . MARCH 2012 1 that the change they helped engineer would bring the jobs Last year Tunisia was able to mobilise sufficient financial help they desperately crave, a step on a social ladder which had from multilateral and bilateral donors: but loans each from the all but disappeared under Ben Ali. One year on they are World Bank and the African Development Bank (worth $500m discovering the miracle harder to materialise than they ex- each), monies from the European Union and bilateral aid - from pected. the Agence Française de Développement Extérieur – Eur185m, the European Union - Eur55m and Algeria - $100m) were not enough to prevent a decline in official foreign exchange reserves by $2bn at year end 2010 to $7bn at the end of February 2012, Selected indicators equivalent to just over three months of imports. Tunisia should be able to mobilise equivalent sums this year. Meanwhile, its 2009 2010 2011e 2012f 2013f rating has declined a little, from BBB+ to BBB- which spells Real GDP, % change 3.1 3.0 -0.5 3.2 4.0 higher borrowing costs were it to test the waters of the interna- CPI, % change, eop 4.1 4.0 4.2 3.1 3.7 tional bond market. On a visit to Tunis last January, the Direc- tor General of the IMF, Christine Lagarde told the government Exchange Rate, eop, (DT/$) 1.32 1.44 1.50 ... ... that the IMF was more than willing to help Tunisia if necessary. Current Account Bal., $ bn -1.2 -2.1 -3.1 -2.9 -2.7 Mustafa Nabli is adamant that the independence of the institu- % of GDP -2.8 -4.8 -6.6 -6.2 -5.6 tion of which he has been the steward since the fall of Ben Ali should not be compromised: the governor of the Central Bank Official Reserves, $ bn 11.1 9.5 7.4 7.5 8.2 is playing an active role in drumming up international financial Months of Imports 5.7 4.3 3.2 3.0 3.1 support for Tunisia but has warned that it would be unwise to pursue last year’s policy of monetary easing in 2012. External Debt, % GDP 48.2 46.0 47.6 51.2 53.6 Budget Balance, % GDP -2.7 -1.3 -3.7 -5.6 -5.0 Public Debt, % GDP 42.9 40.5 43.0 45.9 48.2 Tourist Arrivals 20 e = Estimate / f = forecast. Source: IFF january 2012 10 0 Yet all is far from bleak in Tunisia today: every citizen appre- ciates the freedom to speak and write. Public opinion is out -10 and it will not be able to put that genie back in the bottle. The other enormous relief is the virtual disappearance of a heavy -20 handed and hated security force which never shied from us- yoy % Change, -30 ing torture to break opponents. Though economic activity de- clined last year, a 1.85% decline in Gross National Product is -40 a small price to pay for such a momentous achievement. The current account deficit widened to $3.2bn. Equivalent of 7.4% -50 of Gross Domestic Product (GDP) in 2011 from $2bn in 2010 but while the trade surplus remained stable, the surplus in Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 net services and transfers declined from $2.5bn to $1.6bn as Source: IFF january 2012 a consequence of the fall in tourist receipts and remittances (150,000 Tunisian workers fled Libya). Inflation increased, an inevitable consequence of the monetary easing last year which was initiated to starve off economic collapse but the Unemployment has soared to an estimated 800,000 meanwhile, sharp rise in prices overall – in January 2012 alone it was fuelled by the 50% decline in foreign tourists visiting Tunisia. 0.7%, is explained by the rise in the price of fruit and veg- This sector accounts for 7% of direct GDP and employs 400,000 etables, not least owing to strong demand from Libya. The people. Foreign income from tourism was in 2010 equivalent external debt remains manageable at 47% of GDP because to 6% of GDP. Many hotels are closed and unlikely to reopen bilateral and multilateral creditor account for 72% of medi- soon as the crisis in Europe acts as a major brake on holiday um and long term external debt while debt service payments budgets with the exception of Germany. The Tunisian admin- are equivalent to 9.5% of exports of goods and services. As istration is functioning a minima: many state projects are in the International Institute for Finance points out in it slates abeyance as provincial governors and mayors dare not take report on the country “the level of official foreign exchange any decisions while payments to local suppliers are delayed, reserves, while declining, appears to be adequate at 170% of thus forcing the downsizing or closure of scores of small com- short term debt” 1. panies. In the phosphate mining region of Gafsa, an offer by the state Groupe Chimique to create 4000 new jobs to alleviate the great poverty which bedevils the region led to tribal riot- ing – 17,000 new jobs were needed in a situation which has been compounded by endless strikes which have cut the pro- 1. Institute of International Finance Tunisia: Headwinds Impede a Strong Rebound in duction of phosphate rock by more than half and the export of 2012, January 23, 2012 phosphate rock and derived products by 34.8%. 2 notes internacionals CIDOB 49 . MARCH 2012 notes internacionals CIDOB 49 . MARCH 2012 Cultural war games contribute nothing to investment the country enjoys. Investors hate uncertainty rebuilding trust, law and order and while few foreign companies have left – 172 accord- ing to the Foreign Investment Agency, leading to the loss The break down of law and order affects the economy in of 8-9000 jobs, most are playing a game of wait and see. three ways. As the machinery of government has weakened, Important foreign and local investors increased industrial industrial sites are being robbed of all kinds of raw materi- last year compared with 2010 by 10.2% to $4bn. Private als and machines by gangs which are never brought to trial. entrepreneurs, be they Tunisian or foreign are in agreement In the port of Radès outside the capital, a flood of private on one point: investment intentions, which dropped by a goods, notably Chinese, flows through without paying cus- quarter last year, will only pick up if and when the gov- tom duties and contributes to a fast growing informal sector ernment demonstrates its capacity to re-establish law and which some observers say accounts for roughly 30% of GDP order.
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