🇹🇳💰 Tunisia and the IMF conflict

Previous week the EU delegation arrived in Tunisia to speak with the president Kais Saied. The official reason were talks about the energy cooperation and trade and investment. However de-facto EU leaders wanted to negotiate a financial aid of 900 million euros to Tunisia and try to mend the disagreement between the Tunisian government and the IMF regarding the loan.

EU countries said back in the spring that they fear a default and further destabilization of the internal political situation in Tunisia that would lead to a new influx of illegal migrants, who use the North African country as one of the transit points.

🔻But what’s going on between Tunisian government and the IMF? In 2022 Tunisia and the IMF began talks about the $1.9 billion loan. Since successful yet controversial Tunisia referendum in 2022 that as a result increased the power of the president, even more controversial parliamentary election in 2023 and disputes over IMF-required reforms the organization blocked the loan.

▪️These reforms are a classic set of tools to establish total control over the economy and infrastructure of the country. IMF among other things demanded Tunisia to: eliminate subsidies on consumer goods, especially flour and fuel; comprehensively reform state-owned enterprises; liberalize the economy and provide opportunities for investment; increase the tax base by reducing the shadow economy; reduce government spending by reducing subsidies; reform the public sector, increase its transparency and prepare a reform plan; invest in "green" technologies, water and sewage systems, etc.

🔻In early April, the Tunisian president fully refused to comply with IMF demands or as Saied called them “diktats”. The Tunisian president, whose term ends in 2024, understands the seriousness of the situation and is not ready to comply with such harsh conditions.

▪️Colleagues from French channel Actualités mondiales & françaises greatly pointed out that agreeing to IMF conditions would not only worsen the already precarious situation in Tunisia, but also lead to the political suicide of the current government.

🔻By making such statements, Kais Saied is most likely just bargaining to get more favorable lending terms. And the proposed loan by the EU shows that it works in some way. However, as the history of the IMF and other such institutes shows, agreeing to their terms will only lead to the direct control of natural resources, state enterprises, the financial sector and infrastructure of the country by Transnational corporations.

▪️On the other hand, the Tunisian government is now looking for an alternative source of money and, among other things, wants to apply for membership in BRICS to receive subsidies from the New Development Bank.

🔻Only future will show us what will come out in the end. We hope that for Tunisia it will not end badly and somehow the government of Saied will find a way to recovery, since his rule most likely continue after 2024 elections.

#Tunisia #IMF

@africaintel