The night riots of young Tunisians this week underscored the depth of the economic crisis in the Arab world’s only democracy as it grapples with growing poverty and widespread unemployment.
Violent protests swept through at least 15 towns and the police clashed with teenage protesters, using tear gas and water cannons to disperse the young people who were throwing stones. Hundreds of people were arrested and the army was deployed to prevent the looting of shops and banks.
“The protests reflect the extremely tense atmosphere in the country,” said Ons Ben Abdelkarim, senior partner in Tunisia at Attentation State, an international development group.
“These are teenagers protesting and there is desperation and a lack of perspective on what their future will look like. This adds to the economic stress of the pandemic and the blockages that make the situation flammable. “
The explosion of anger – sparked by footage of police mistreating a shepherd – comes as the country marks the 10th anniversary of the revolution that toppled Zein el-Abidine Ben Ali, the longtime dictator.
But Tunisians are not in a festive mood, as the coronavirus pandemic has further marked an economy in difficulty for a decade.
The economy contracted by about 8% last year, according to the rating agency Fitch, its biggest drop since independence in 1956. Economic growth since the revolution has averaged 1.8 %, which is not enough to reduce high unemployment levels, especially among young people, where the unemployment rate reached 36.5% in 2020, according to the International Labor Organization.
The Tunisian National Guard stands guard during clashes with demonstrators in Tunis on Sunday © Fethi Belaid / AFP / Getty
The pandemic has decimated the country’s crucial tourism industry, reduced exports to Europe, Tunisia’s main trading partner, and caused the closure of thousands of businesses, according to the government and international organizations. Tourism revenues plunged 65% in 2020 and a recent survey by the International Finance Corporation showed that 5.4% of Tunisian businesses had closed permanently due to the health crisis.
Officials have hinted that they will seek an IMF loan because the country’s external financing needs have increased. Fitch expects public debt to reach 89% of gross domestic product in 2021, up from 72.5% in 2019. Increasing public spending to mitigate the impact of the virus has pushed the budget deficit to around 10%. , 5 percent of GDP, from 3.3 percent the year before, according to Fitch.
But IMF borrowing would depend on painful reforms that previous governments were unable to implement.
“The immediate priority is to save lives and livelihoods until the effects of the pandemic subside,” said Chris Geiregat, IMF chief of mission for Tunisia. “[But] restoring the sustainability of public finances is something that cannot wait and it must begin this year. “
Areas for reform include the civil service wage bill, which at 17.6 percent of GDP is “among the highest in the world”, energy subsidies and loss-making state-owned enterprises. “When you have little or no fiscal space you will have to strictly prioritize your health and welfare spending and that means something has to give,” Geiregat said.
The high turnover of governments – there have been 10 since the revolution – has further hampered reform. Many have been backed by weak coalitions in fragmented parliaments, with no party holding a majority.
“Meeting IMF conditions will be difficult, given previous surges between unions and government over public sector wages,” said James Swanston, Middle East and North Africa economist at Capital Economics, the London-based consulting firm.
“Given the global pandemic and the likelihood of rising consumer prices, unions could demand wage increases again and the government might think it has no choice but to succumb with pressure.”
As the coronavirus exacerbated the crisis, Prime Minister Hichem Mechichi said in a speech in November that the country’s economic woes were only partially caused by the virus.
“Our country has not been able to establish an economic road that will allow us to emerge from the economic difficulties that we have known since 2011,” he said, pointing to what he called ” loss of hope for the future “illustrated by the increase in the number of illegal Tunisian migrants making the perilous sea voyage to Italy.
Protesters block a street on the outskirts of Tunis © Fethi Belaid / AFP / Getty
The government’s response to the protests has drawn criticism. “Poverty, marginalization and exclusion must be addressed with fairness and dignity, not defamation and criminalization,” said the Tunisian Forum for Economic and Social Rights, a civil society group.
The deterioration of the economy has undermined confidence in the political system and the politicians that emerged after the revolution. This has contributed to the meteoric rise in opinion polls from Abir Moussi, a controversial party leader and former leader of Ben Ali’s ruling party. She was able to tap into a well of nostalgia for a period of perceived economic stability under the dictatorship.
“Democracy is not yet threatened but it must be at the service of the population,” said Ms. Ben Abdelkarim.
“They have to see that it can create a better life for them. There is a danger that people will stop believing in it. We’re not there yet, but the government can at least start with reforms that aren’t controversial, like cutting red tape to make it easier for foreign investors to come here. “
