Lately, the International Monetary Fund (IMF), one of Tunisia’s main donors, clearly posed, as a condition for the continuation of its financial support to our country, strict requirements for the continuation of the economic reform plan. prepared by Tunisia and which has registered a significant delay.
By Atef Hannachi *
–
Among these requirements, we can mention 1- the pursuit of efforts to “Reduce energy subsidies that disproportionately favor the better-off”, these represent nearly 45% of the subsidy budget, against 43% for basic products and 13% for transport; 2- reduction of the public sector wage bill “Which is proportionally among the highest in the world”, since it currently represents 16.6% of GDP and 49% of state budget expenditure; 3- the adoption of the bill on pension reform “To improve the financial sustainability of the social security system”, whose deficit exceeds 3 billion dinars; 4- taking decisive action “To fight inflation, reduce the budget deficit and protect the poor” with the increase in interest rates and the release of the dinar against currencies …
Very little room for maneuver
These measures remain difficult to put in place in Tunisia, especially since the Covid-19 health crisis has worsened the economic crisis and widened the public finance deficit, in a context of political instability and an upsurge in social unrest in all the regions.
Faced with this explosive situation, the government’s room for maneuver is certainly very limited, but action must be taken on several axes to meet reform commitments.
To reduce the wage bill, the State has an interest in using the public-private partnership (PPP) formula by creating companies in value-added sectors and transferring part of the wage bill to companies like Steg Energies Renewables, created in 2010, under this regime, to materialize the national policy on the promotion of green energies.
With regard to the deficit of social security funds, the State can initiate a reform of the financial mechanisms of pension plans, and in particular the liberalization of their internal financing methods and their investment mechanisms which remain limited to the sector. banking.
Regarding the reduction of energy subsidies, the State has an interest in accelerating the transition to renewable energies and establishing a new grid of consumption and benefit of subsidies in this area.
Control inflation without slowing down investment
There remains the point relating to the exchange rate and the interest rate (currently fixed at 6.25%, against only 1.5% in Morocco and 2.5 in Jordan, countries comparable to ours) and, in this area, the Banque centrale de Tunisie (BCT) has an interest in re-establishing the classic distinction between interest rates applicable to households and those applicable to investors, which will make it possible to control inflation somewhat (estimated 4.9% in January 2021 ) without slowing down investment, the rate of which fell from 24.6% in 2010 to 18.5% in 2018 and which, because of the crisis, continues to take a nosedive. This has a negative impact on growth and employment and jeopardizes the chances of reviving the economic machine.
* Accountant.
Articles by the same author in Kapitalis:
–
