Tunisia - between instability and renewal | European Council on Foreign Relations - 0 views
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Even though the 2011 revolution was motivated in large part by socio-economic concerns, the governments that have held office since then have been unable to improve the situation. Growth has remained low, and unemployment is high: 15 percent of the population is without work, and the rate for those with a university degree is over 30 percent. Inequality between the more prosperous coastal region and the deprived interior of the country remains striking. Around half of all workers are employed in the informal economy. Many young Tunisians lack any prospect of being able to afford a home or a car, or of being secure enough to start a family.
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Faced with increasing debt and deficit levels and shrinking foreign currency reserves, Tunisia agreed a loan of $2.9 billion with the International Monetary Fund in 2016. The IMF called on Tunisia to cut public spending, overhaul its collection of taxes to raise government revenue, and allow the currency to depreciate. The IMF argues that it has been fairly flexible so far in enforcing public spending cuts, but it is now stepping up its pressure on the Tunisian authorities.
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Wages in the public sector account for 15 percent of GDP (up from 10 percent in 2010), so it is hardly surprising that the government is now trying to limit spending in this area. Yet it is doing this at a time when inflation (worsened by the deflation of the Tunisian dinar that the IMF has promoted) and subsidy cuts have already had a severe impact on people’s purchasing power.
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