Where normalcy is hard to find

Whether public or private, creative or industrial, the Tunisian citizen faces an uncertain future. Kais Saied’s controversial rise to the post of prime minister has deepened financial instability, with social repressions only adding to Tunisia’s misery.

“This country is in ruins, says an exasperated artist, Yassine Ben Miled. I haven’t found gas for two days, I can’t go anywhere! Based in Carthage, a chic suburb of the capital, he had been unable to source or deliver his works.

The government’s inability to pay for oil imports led to nearly dry pumps and long queues for several days in October. The energy minister told a radio station that panicked buyers were to blame. Almost after the fact, she mentioned the state’s financial problems.

In his own way, Ben Miled, 36, embodies both the ambition and the frustration felt by many in the small North African country hailed as the only Arab country to transition to democracy after regional uprisings in 2011.

“Public finances are unsustainable: the 2022 budget deficit is estimated at 9.7% and public debt is above 87% of GDP

In his workshop, he designs Arabic calligraphy with an unprecedented innovation: adorned with pins, calligraphy gives depth. “The inspiration is Martin Luther’s 95 theses pinned to the door of the church,” he explains.

An example of Yassine’s calligraphy [photo credit: Yassine Ben Miled, @ybm_calligraphics]

Drawing inspiration from East and West is common here. Located on the Mediterranean, Tunisia is a melting pot of Arab, Amazigh and European influences. Relatively stable and educated, on the face of it, the country should do well; but many young Tunisians are seeing their hopes snuffed out by an unprecedented economic crisis.

Shortages plagued the country for much of the year. The crisis predates the Russian invasion of Ukraine, but the conflict between Tunisia’s first and second grain supplier has had predictable negative consequences. Soaring commodity prices have drained foreign exchange reserves and wreaked havoc on the state budget.

No country imports more grain per capita than Tunisia, but the government has repeatedly turned back shipments due to a lack of funds. A shortage of bread has upended dietary expectations. “This is not a country that can survive long without bread,” said Cyrus Roedel, a researcher co-author of the podcast series. Revolution 1: The story of the Tunisian uprising. “Bread is a major part of the average person’s calorie intake.”

Bakers have adapted by maintaining prices but reducing the size of the loaves. Last month, however, those who run state-supported bakeries went on strike after the government failed to provide them with subsidies. Subsidies allow bakeries to keep prices low, operating at an initial loss until the state transfers money. Without this transfer, the bakeries cannot remain in business.

The closure of subsidized bakeries has left private stores unable to keep up with new customers willing to shell out more dinars rather than go without bread. The Sidi Bou Bakery near Carthage is now running out of bread before noon.

The dairy sector was also affected by the war in Eastern Europe. Farmers are caught between high feed prices and the government’s reluctance to lift the milk price cap. Unprofitability – operating at current levels means a 25% loss – has forced many farmers to abandon production. Milk is scarce on market stalls.

“My dairy prices have gone up by at least 8%,” said Marco Ouadday, owner of Gavroche, a pastry shop. The rising cost of doing business is being felt everywhere, but perhaps most so in the culinary sector where rising input prices rival supply uncertainties as a source of anxiety. “Long-term planning is out of the question,” says Ouadday.

The list of shortages is long: coffee, honey and bottled water can be hard to come by. Local Coca-Cola factories have temporarily suspended production of sugary drinks due to sugar shortages.

After repeated delays in payments to importers and domestic producers, the full confidence and credit of the government was exhausted.

In the past, the state had been able to pay suppliers in installments, allowing it to spread its portfolio to meet national needs. But with producers demanding full upfront payment, supply trade-offs have become a feature of governance.

The gasoline shortage has forced the state to prioritize gasoline imports, but paying for oil means payments for other goods will be postponed.

Public finances are unsustainable: the 2022 budget deficit is estimated at 9.7% and public debt is over 87% of GDP.

Much of the problem lies in the overstaffed public sector. Under pressure to reduce unemployment, successive governments have used state enterprises and bureaucracy to hire desperate but surplus workers.

Public salaries now account for half of state expenditure. The government is already spending a lot on servicing the debt. They take out loans to pay loans that have existed since the Ben Ali era, the former dictator who ruled Tunisia from 1987 to 2011.

President Kaid Saied has turned to the International Monetary Fund for a bailout to avoid a default on international loans. An interim loan of $1.9 billion was negotiated, half of what Tunisia had requested.

IMF aid comes with stipulations to reduce subsidies and public wages. Previous governments have repeatedly failed to deliver on promised reforms, and it remains to be seen whether this one will be any different. The president has shown little interest in economic policy and his hand-picked prime minister, Najla Bouden, is a former geology professor (and friend of the president’s wife) with no government experience.

The IMF mandates are opposed by the UGTT union, which has a million members, which has threatened to strike if the government decides to cut wages and subsidies. Roedel wonders if the government will use the IMF loan as a stopgap measure and “get the problem out on the road.”

To maintain foreign exchange reserves for essential goods, such as food and energy, the president has restricted the import of goods he deems unnecessary (he mentioned pet food as an example). The depreciation of the Tunisian dinar (DT) means that the state must convert more dinars for fewer dollars.

Tunisians will still have to spend more dinars on goods that need to be imported, dealing another blow to living standards as wages stagnate.

About 20% of the population lives with 16DT per day. Unemployment is over 18%. The success story of the Arab Spring looks bleak.

Khelil Bouarrouj is a writer and civil rights activist based in Washington, DC. His work can be found at the Washington Blade, Palestine Square and in other publications.

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