With The Ongoing Economic Crisis, Tunisian Businesses Ask for A Radical Reform

The shock that followed July 25, 2021, power grab by President Kais Saied is gone, and Tunisians now wake up to one of the most dangerous economic crises since independence.

Even though the 2011 revolution ended Zine El Abidine Ben Ali’s dictatorship, when Kais Saied was elected president in 2019 promising anti-corruption measures, the country was still facing deep economic problems.

Promoting populist ideas and entrenching power in his hands, Saied does not believe in foreign assistance to Tunisia, slamming the work of international institutions and rating agencies. “The rating agencies cannot give us any grades they want. We are not their students and they are not our teachers,” he said.

But decades of clientelism, corruption, and the absence of any form of strategic planning are not the only symptoms of the chronic economic crisis inherited by post-revolutionary Tunisia. Ideological disputes and political arrangements prevented all the elected governments since 2011 from tackling the real sources of the crisis.

The Covid-19 pandemic and the grain crisis have just sunk Tunisia deeper into an economic crisis, as the cost of living has spiked, hitting the poor and middle class alike, amid shortages of basic goods and unemployment.

Despite his anti-corruption image, Saied has closed Tunisia’s anti-corruption authority, composed of 20 offices dedicated to investigating cases of corruption and developing more transparent governance.

Small businesses have been hit hard by the economic crisis as the government has failed to handle endemic problems that stifle innovation.

“A couple of years ago spinach was two dinars a kilo, now it’s four or five dinars [$1.30 – $1.60] a kilo, but our profit margins go down,” Ahmed Landolsi, who runs a vegetable stall in the hall of Tunis’ central market, told Al Jazeera. “The rent I pay the municipality for my stall keeps increasing, but they don’t help us. The big problem for us traders is the loss of customers – they used to be able to park their cars and come and shop, but they are blocked by the new market outside,” Landolsi continued.

He said legal vendors are struggling to compete with the cheap prices offered by the informal sector. According to a report by the Carnegie Middle East Center, it is likely that much of the products are smuggled in from Algeria and Libya, but originates from China and Turkey.

Indeed, small vendors also complain of being forced into bankruptcy by mass producers and state economic policies.

Houssem Saad, member of Alert Tunisie, an economic rights association, told Al Jazeera that big corporate groups selling produce benefit from Tunisia’s state-sponsored food subsidies: many goods including grain, sugar, and coffee are bought by the state, which sells quotas to a limited group of large traders who can then sell onto the Tunisian market.

These offices are highly indebted and are forced to borrow from banks at high rates. But these banks tend to be owned by the same groups that own the companies importing staples, too.

Meanwhile, the Middle East Institute has reported that Tunisia’s cereals office owes Ukraine $300 million for unpaid shipments of wheat and barley. Debts have given Tunisia a bad payer reputation, making it harder for the state to source these staples, causing regular food shortages.

“The solution is to break the rent-seeking economy and to give people economic rights, the right to entrepreneurship, the right to open a bank account – they didn’t manage to give these rights in 10 years of democracy,” Saad told Al Jazeera.

However, he is unsure over whether Tunisians will be able to get those rights when President Saied’s new constitution is introduced, with fears that it will entrench power in his hands.

 

 

 

 

 

 

 

 

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