Tunisian PM plans broad reform package, talks with unions
TUNIS: Tunisia’s prime minister plans key talks with unions to hold down state sector wages and sees close to 3 per cent economic growth next year from a package of reforms aimed at underpinning the democracy won in the 2011 revolution with economic gains.
Youssef Chahed, a French-educated agriculture specialist in office less than a month, is sensitive to how fragile the social peace is in Tunisia but expressed confidence that he could deliver on reforms with his new national unity government. “All reforms are sensitive but we are going to resolve everything through dialogue and consensus,” Chahed told Reuters in an interview.
He said his government would first stabilise the public deficit, including bringing under control the large public wage bill, and focus on creating new revenue.
“We need the economic component to be managed now because the political component remains fragile,” he said. “We are going to demand exceptional efforts.”
He said a four-year plan estimated average growth at around 2.5 per cent. Growth last year was 0.8 per cent after three big militant attacks battered the vital tourism industry.
The deficit this year would widen to 6.5 per cent compared with 4.4 per cent last year. “For 2017, growth will be close to 3 per cent,” he said.
Tunisia faces a debt service payment of $3 billion next year, and the central bank has warned the government may struggle to come up with the $450 million a month it needs to pay public employees. The public wage sector represents a huge portion of Tunisia’s public spending. At 13.5 per cent of GDP, it is one of the highest in the world, a remnant of the system of high state employment and subsidies from the Ben Ali era.
But how successful curbing or controlling public wages will be depends on negotiations with the powerful UGTT and UTICA labour unions on whether they will allow a freeze in wage increases and in public sector recruitment.
Earlier this year, the IMF approved a $2.9 billion four-year loan for Tunisia, but urged acceleration of reforms.
“We have a complete package to stabilise the budget - an extraordinary tax for companies (and) calling on the UGTT to freeze salary increases. The idea is to get an agreement on a complete policy for growth,” Chahed said.