The political crisis in Tunisia threatens to intensify economic problems

The political crisis in Tunisia threatens to intensify economic problems ...

  • Summary
  • The political paralysis affects efforts to fix economic problems.
  • Tunisians believe their living conditions are deteriorating.
  • If required, assistance from the IMF is required.

TUNIS, September 27 (This September 27, story corrects to show paragraph 4 quote about escalope price, not scallops)

Nurse Amira Souissi celebrated when Tunisian President Kais Saied seized nearly total power in July, promising to fight corruption, raise prices, and boost state finances.

But the mother of four is now losing patience with what some Tunisians call a coup, despite his lack of an economic game plan.

Souissi stated that her salary of 1,000 dinars ($350) per month can no longer keep pace with the high cost of living, with inflation hovering at 6.2 percent, and it is difficult to obtain a bank loan due to scarce cash.

"We anticipated that prices would drop. But look at the price of a kilogram of wine rose from 15 dinars to 19 dinares," she said at stifle in the Ibn Khaldoun district of the capital.

Anger at economic stagnation, exacerbated by the epidemic, caused presumably widespread support for Saied's July 25 intervention.

However, Saied is now being subject to a rise in pressure to address Tunisia's economic difficulties after the political crisis compromised the democratic gains that Tunisians gained during the 2011 revolution, which triggered the Arab Spring protests.

Saied's intervention prompted a slew of delayed talks with the International Monetary Fund on implementing if he had hoped to obtain further economic assistance and avoid causing repercussions on public finances.

"The situation is crucial in the economy and public finances, in particular.. We've been on the verge of collapse for months," said economics analyst Moez Joudi.

"But the political crisis now, as well as the absence of any program and a clear economic outlook, is really accelerating the entire collapse."

Saied predicted that his focus on politics may turn Tunisia into another Lebanon, which is in the throes of a financial crisis that the World Bank has called one of the most severe depressions in modern history.

Three-quarters of Lebanon's population have been plunged into poverty, and its local currency has lost 90% of its value in the previous two years.

Saied has yet to choose a new government, form any comprehensive economic strategy, or say how he will finance the public deficit and debt repayments, despite the prime minister's resignation, having freezed parliament, and power to rule by decree.

ECONOMIC WOES

The president's office was not available to comment on the economic situation in the North African nation. Aside from that, neither were experts in economic and financial matters.

Tunisia returned more than $1 billion in debt from foreign currency reserves this summer, but it must find about $5 billion more to finance a projected budget deficit and additional loan repayments.

Saied still has a large support from skeptics who have been depressed, and he claims reshape hands. However, political paralysis raises fears of turning around the economy.

Mohamed sat in a cafe with two friends complaining that he had been without employment for four years, wishing if merely given his first name Mohamed only walked away.

The economic conditions are a real test for the president, he stated. The situation is terrible. The president has opened a door of hope for us," he added.

"I hope he doesn't close it fast, and ecstatic." We want to see the president attract investment and provide us with work."

The State Statistics Institute has stated that unemployment is 17.8 percent, and the fiscal deficit has risen to more than 11 percent in 2020, according to the State Statistic Institute. According to the IMF, the economy climbed 8.2 percent last year, whereas public debt rose to 87 percent of gross domestic product.

Both the powerful labour union and foreign lenders have little choice but to restart the IMF process. According to central bank data released on Monday, while Tunisia requires about four billion dinars per month to pay wages and pay off debts, the state Treasury has only 544 million dinaris.

Saied has stated that his actions are necessary to address political paralysis, economic stagnation, and a poor response to the epidemic. He promised to keep his rights and not be a dictator.

The president has not set a time limit on his removal of power, but he promised to assemble espionage committees to assist draft modifications to the 2014 constitution and establish 'a true democracy in which the people are truly sovereign'

Several thousand demonstrators rallied in Tunis on Sunday to protest at Saied's power grab, calling on him to step down in the most visible public anger since his intervention.

Michael Georgy wrote, Editing, and William Maclean wrote.

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