Time running out for Kais Saied to fix Tunisia’s economy

Nine governments in 10 years, the worst COVID-19 experience in the region and a collapsing economy make up the legacy of the so-called Arab Spring in Tunisia. It was, therefore, no surprise that, when President Kais Saied last month sent a tank to bar the doors of parliament, thousands of Tunisians who were previously weary of authoritarianism supported him.
Saied’s move sought to bring some order to the chaotic parliamentary situation in the fledgling democracy. The Ennahda party, which was propelled to power following the collapse of Zine El-Abidine Ben Ali’s security state, failed in its decade in power to improve the lives of Tunisians, who are still chanting for “work, freedom and dignity.”
The simple manner of the constitutional law professor-turned-strongman gave him an electoral advantage and put Tunisians at ease about his ambitions. The academic who famously refuses to take lunch in the presidential palace — preferring to break bread with his wife at home — was a breath of fresh air in a political environment where those long downtrodden were only too ready to assume the limelight.
Tunisians had hoped that regime change would bring an end to the clientelism of the Ben Ali years, but the country continues to rise on corruption indices. Systemic corruption across public services, customs and outdated legislation have crippled an already-fragile economy. Foreign companies continue to flee and, since the recent turn of events, the state has sought to stagnate matters further, with all company directors facing travel restrictions.
Spiraling inflation and widespread unemployment characterize a state where public debt has risen to 80 percent of gross domestic product. When Saied sacked the prime minister and suspended parliament, he conceded that the economy needed urgent attention. However, he has yet to articulate any broad economic policy or outline how he intends to finance the public deficit and debt repayments.
To find a way out of the abyss, the previous government this year turned to the International Monetary Fund for Tunisia’s fourth bailout in a decade. But political turmoil derailed this process and the long-delayed talks with the IMF aimed at averting a crisis in public finances have yet to resume.

The president has yet to articulate any broad economic policy or outline how he intends to finance the public deficit and debt repayments.

Zaid M. Belbagi

Despite the economy shrinking by almost 10 percent last year, Tunisia paid back more than $1 billion in debt this summer from its precious foreign currency reserves. It must also urgently find $5 billion more to finance its projected budget deficit and further loan repayments.
Tunisia’s bloated public sector remains a huge strain on the economy, with the salary bill of the country’s 700,000 civil servants estimated to be $5.6 billion, absorbing 70 percent of the state’s finances. The number of public servants has grown year on year, doubling since the revolution. Successive governments have used public jobs to appease public discontent. However, with civil servant absenteeism high, preserving this decayed hierarchy amid a wider national economic crisis will be controversial. The public sector has become a byword for corruption.
The pandemic has only exacerbated matters, pushing a further half a million Tunisians below the poverty line and driving unemployment to almost 20 percent. With a sitting parliament needed to debate a new budgetary law to fill Tunisia’s widening fiscal gap, Saied’s takeover needs to be followed with an extended period of functional government. Without this, the country will remain politically volatile and economically stagnated.
Political instability has led to the fading of Tunisia’s export market, making the country ever more reliant on foreign aid. The country’s phosphate, oil and gas industries underperform due to a lack of investment and corruption, while the mainstay industries of salt and agricultural production do not generate enough income to lift the country out of its economic crisis.
Within this context, the lack of a clear economic roadmap is prohibiting a resolution to the situation. Saied ruling by decree, having extended the freeze on parliamentary powers, means protesters remain a common feature on the streets. Though they are currently generally supportive of his consolidation of power, his increasing political isolation means that, going forward, he alone will have to find a way to resolve Tunisia’s chronic economic troubles.

• Zaid M. Belbagi is a political commentator, and an adviser to private clients between London and the Gulf Cooperation Council (GCC). Twitter: @Moulay_Zaid