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Tunisian debt relief campaign supports Egyptian equivalent, says head

Fathi Al-Shamkhi, coordinator of the Popular Campaign to Drop Tunisia’s Debt, talks to Ahram Online about how nearly all of Tunisia's woes find their origin in foreign debt

Marwa Hussein, Wednesday 2 Nov 2011
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The Tunisian coordinator of the Popular Campaign to Drop Tunisia's Debt left Egypt Wednesday, after announcing his support for the Egyptian equivalent campaign that kicked off last Monday. Both campaigns issued a common statement saying that they would coordinate together in order to achieve their goals. One of the forms of the coordination will be the organisation of simultaneous protests in front of the World Bank's officies in the two country's capitals.

Regarding Tunisia, to which extent do you think the main parties that won in the elections for the assembly that will draft the new constitution can cooperate on economic issues?

Let’s see first the economic trends of the main parties in the assembly that should compose a governmental coalition. Ennahda, the Islamist party that won 45 per cent of the votes is totally liberal, maybe even more than the ousted Ben Ali government. The Congress for the Republic, which won 15 per cent of the votes, is a leftist party that rejects most of the politics adopted by the Ben Ali regime, which creates some tensions with Ennahda. Finally, Ettakatol, also a socialist party who won 11 per cent of the votes, is looking for change also. For the moment, the three parties agreed to respect the commitments of the previous government on the economic and social levels, to assure the business community. I think that the Congress for the Republic will call later for the revision of some of the agreements, like the 60 agreements on the protection of foreign investment, the free trade agreement with the European Union, and the restructuration agreement with the World Bank and the IMF.

What is the reaction of these parties on the campaign to drop Tunisia’s debt? Have they showed any support?

The campaign consists of three parts; the first is to suspend the debt service payment. Meanwhile, all loan agreements must be reviewed and evaluated to recognise the share of illegitimate debts. Finally, these debts will be cancelled by Tunisian decision. Ennahda announced it rejects the suspension of debt payment; however, it agrees over the revision of the debts. Ennahda showed understanding of the campaign during the previous period of the elections. The same vision is adopted by Ettakatol, while the Congress for the Republic supports the full campaign, including suspension of payment.  

Do you think that foreign debtors will accept that you drop the debts?

We don’t need their acceptance and we don’t accept any pressure — it will be simply a Tunisian decision. We didn’t need the permission of the West to expel Ben Ali. We have also to direct our economy as we want. Later we will sue the World Bank and the IMF for collusion with the Ben Ali regime against the Tunisian people. Dominic Strauss-Khan visited Tunisia before Ben Ali was ousted and called him the best person and regime in the world. The Tunisian people didn't look for these loans or benefit from them.

How was the debt accumulated in Tunisia?

When Ben Ali came in power in 1987, Tunisian debt was about $3.5 billion. It reached $25 billion now, with 25 per cent of the population under poverty line and an unemployment rate amongst the most high worldwide. Per capita debt jumped from 500 dinars to 2500. The Tunisian economy was suffering; the programme of restructuring, which includes privatisation, was a kind of artificial breath to the economy, and the programme was financed through debt.  

What is the link between privatisation and debt?

Privatisation seems very disconnected from debt but in fact is very linked to it. The privatisation programme benefited mainly foreign investment. The investment law in Tunisia gives foreign investors enormous advantages; their profits are completely exempted from revenue tax. In addition, they are allowed to transfer all their profits abroad. Those companies needed to exchange their profits from Tunisian currency to foreign currencies. Tunisia didn’t have enough currencies and had to borrow. In fact, everything erupts from debt and brings us back to debt. For example, unemployment increased after the government stopped since 1995 employing university graduates to work in high schools, not because the schools were not in need of teachers but to implement austerity policies to be able to pay the debt service, which reached 25 per cent of public spending. The result was an increase in unemployment and deterioration at the education level.

You said in the beginning that some of the biggest parties don’t want to change Tunisia's economic and social policies. Do you think the public can accept that?

I don’t think the public will accept continuance of the status quo. People expect the revolution to make their lives better; so far, the situation is getting worse. Prices and unemployment are increasing. The people accept it for the moment, waiting for the elections and the transition of power, but later things should change. If these policies didn’t work under Ben Ali, why should they work now? 

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