Tunisia’s economic struggles
At the end of 2022, Tunisia’s debt stood at approximately $37 billion, which accounted for 79.9 percent of its gross domestic product (GDP), as reported by the ministry during the session.
The most vulnerable segments of the population have been disproportionately affected by the steep rise in inflation and the global increase in food prices.
The financial agency of the United Nations has urged the enactment of legislation to restructure over 100 state-owned companies, many of which hold monopolies in various sectors of the economy and are burdened with significant debts. Tunisia is currently grappling with a financial crisis characterized by chronic shortages of essential food items, alongside heightened political tensions since Saied’s extensive power consolidation in July 2021.
Official figures indicate that in May, inflation reached around 10.01 percent, while unemployment rose to 16.1 percent in the first quarter of this year, compared to 15.2 percent in the fourth quarter of 2022.
Tunisians have endured a decade of economic stagnation following the uprising that toppled long-time ruler Zine El Abidine Ben Ali in early 2011.
Previous loan agreements with the International Monetary Fund (IMF) in 2013 and 2016, totaling $1.7 billion and $2.8 billion respectively, have yielded limited success in addressing the country’s public finances. President Kais Saied of Tunisia has proposed implementing a tax on the country’s wealthiest individuals as an alternative to adhering to the “foreign dictates” of the IMF.
Despite reaching a preliminary agreement in October of last year for a nearly $2 billion bailout package, negotiations with the IMF have stalled for several months due to demands for public entity restructuring and the removal of subsidies on essential goods. Tunisian Finance Minister Siham Nemsieh has cautioned that failure to repay the loans would result in the “bankruptcy of the state.”
Meanwhile, Tunisia’s parliament announced on Thursday that it had approved an agreement to secure a loan worth $500 million from the African Export-Import Bank.
The EU’s offer to Tunisia
Questions about political situation
Meanwhile, there are many concerns as to whether the EU’s loan will be counter-productive, ending up in the wrong hands, and further aiding Kais Saied at a time when the Tunisian leader is tightening his grip on the country and clamping down on opposition.
In 2021, President Kais Saied, who was elected in 2019, consolidated most of the powers by dissolving the elected parliament, dismissing the government, and assuming rule by decree while rewriting the constitution.
Critics argue that Saied’s actions have dismantled the democratic achievements and freedoms gained through the 2011 revolution that sparked the Arab Spring.
Saied, on the other hand, claims that he is rescuing Tunisia from chaos.
In recent weeks, the police have begun cracking down on opposition groups that accuse Saied of carrying out a coup. Several politicians, labor union figures, judges, a prominent businessman, and the head of an independent radio station have been detained.
Saied denies orchestrating a coup and insists that his actions are legal and necessary to save Tunisia from prolonged turmoil. He has labeled his opponents as traitors, criminals, and terrorists.
When the United States and the European Parliament expressed concerns over his actions, Saied criticized them as foreign interference and assaults on Tunisia’s sovereignty. Last month, he made widely criticized remarks, condemned by rights groups and the African Union, suggesting that undocumented sub-Saharan African immigration was a conspiracy to alter Tunisia’s demographic makeup. He instructed security forces to expel any migrants residing in Tunisia illegally.
This policy has prompted people to flee the country, even if they previously had no intentions of making the perilous journey to Europe, according to a senior United Nations official.
Among the migrants arriving in Italy this year, the largest number originates from Ivory Coast (3,223), followed by Guinea (2,906). The U.N. official stated that they had predominantly departed from Tunisia. By comparison, only 1,535 Tunisians have arrived in Italy so far this year.
A group of experts, activists, and relatives of those detained have cautioned that Tunisia’s escalating crackdown on opposition leaders and critics jeopardizes society and risks the revival of autocracy, years after the country’s demonstrations played a significant role in sparking revolutionary movements throughout the region.
In response to concerns from European leaders about the number of migrants crossing the Mediterranean, President Saied asserted on Saturday that Tunisia would not accept being used as a border guard for other countries. This stance raises doubts about the effectiveness of the EU’s planned deal, as Saied does not appear willing to comply with its conditions.