Factories close, jobs go as Tunisia crisis drags on

BIZERTE, Tunisia, Nov 27, ( RTRS): Tunisia’s “Arab Spring” revolution, born out of economic despair, is failing to deliver the jobs and opportunities of a better life that its people long for, and had once expected.

While Tunisia has largely avoided the bloodshed afflicting much of the region, a prolonged political crisis is hurting the economy badly and Mohammad Abd El Momen is one of the victims.

“We started the revolution and the politicians got the jobs. We got the tragedy,” said El Momen, who until July worked at a factory making safety boots for construction workers in Europe.

Then his Italian employers — like many foreign investors — gave up and closed the plant in Bizerte, a coastal city 65 kms (40 miles) north of Tunis. Now the shopfloor is deserted, the factory gates are locked and 4,500 more Tunisians are unemployed.

“I cannot find even the cash for milk for my children,” El Momen said outside the plant in Bizerte, where former factory families now survive on meagre state handouts.

Prospects

Their prospects remain bleak while ruling Islamists and the secular opposition argue over forming a caretaker cabinet, creating an atmosphere of uncertainty and polarisation that is worrying investors and international lenders alike.

Tunisia’s uprising — and the Arab Spring — began with a cry as much for opportunity as for freedom when unemployed university graduate Mohammed Bouazizi, who scraped a living selling vegetables, set himself on fire in December 2010.

Even before he died from his injuries, outraged Tunisians took to the streets and the following month autocratic leader President Zine al-Abidine Ben Ali fled the country. This raised hopes among Tunisians of a better life, and encouraged fellow Arabs to rise up against their rulers around the region. negative from stable on Oct 11, 2012, arguing that the Moroccan authorities were finding it more challenging to reduce the vulnerabilities created by the twin deficits.

S&P raised Oman’s outlook to stable from negative on July 2, 2012, saying political reforms and economic measures were helping address popular demands and restore stability.

The government forecasts Tunisia’s economy will grow 3 percent this year and next, down from 3.6 percent in 2012 and nothing like enough to create jobs for an expanding population. Growth slowed in the third quarter to 2.4 percent year-onyear.

Unemployment, which hit 15.7 percent of the workforce in July-September, tops the list of Tunisians’ complaints along the high cost of living. Inflation reached 6.5 percent in March, the highest annual rate in at least five years, and has eased only a little since then.

Analysts say there is no sense that public frustrations are close to boiling over again. However, the longer the political crisis drags on, the harder it will be for the next government to balance austerity designed to tackle a rapidly growing budget deficit with discontent over living costs and jobs.

For months, Tunisia’s ruling Islamist party Ennahda and the secular opposition have struggled to end a standoff over handing power to the transitional cabinet which is meant to govern until elections early next year. Ennahda agreed to step down later this month, but negotiations have stalled.

The parties are trying to settle their differences at the negotiating table, in contrast to Syria, Egypt and Libya. Nevertheless, Islamist militants have assassinated two opposition leaders and last month Tunisia suffered a suicide attack at a beach resort, the first in a decade, in a blow to tourism which accounts for around 8 percent of GDP.

All this has shaken economic confidence. This week Moody’s agency cut Tunisia’s sovereign credit rating by one notch to Ba3. It blamed the political uncertainty and polarisation, security risks, problems in borrowing abroad and from international donors, as well as the budget and external deficits plus the need to recapitalise leading banks. stress buffers.

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Moody’s cut Tunisia’s rating to Ba3 from Ba2 late on Tuesday and kept the outlook as negative, citing ongoing political uncertainty, funding challenges and external and fiscal imbalances.

Fitch cut Tunisia’s sovereign rating two notches to BB-minus from BBplus on Oct. 30, 2013, citing political uncertainty and fragile public finances. The outlook remained negative and Fitch warned it could cut further if the political crisis intensified or if the budget and current account deficits didn’t decrease

Standard & Poor’s cut its credit rating for Tunisia to BB-minus from BB and changed its outlook to negative from stable on Feb 19, 2013, citing a risk the tense political situation could deteriorate further amid a worsening economic outlook.