Tunisian trade union warns country is ‘moving towards collapse’ after rise in fuel prices

Bassem Aly , Monday 7 Jun 2021

The UGTT will protect the rights of the Tunisian people and their choices, Al-Tabboubi stressed during a meeting that was specifically held to discuss this issue.

UGTT headquarter in Tunis
File Photo shows the outside of the Tunisian General Labor Union (UGTT) headquarter in Tunis. AP

Tunisia’s General Union of Labour’s (UGTT) secretary-general warned that the country is “moving towards collapse” following a recent increase in fuel prices, Al-Arabiya reported on Monday.

Nour El-Din Al-Tabboubi vowed that the UGTT — one out of four Tunisian institutions that received a Nobel Peace Prize in 2015 for brokering a post-revolution, transitional deal between political forces — will not remain silent.

The UGTT will protect the rights of the Tunisian people and their choices, Al-Tabboubi stressed during a meeting that was specifically held to discuss this issue.

Men’em Emera, UGTT’s assistant secretary-general, accused the government of Hichem Mechichi of “falling into the trap of the donors and IMF’s dictations, which will negatively affect the social conditions of the country.” Emera emphasised that the UGTT “adheres to supporting basic goods as one of the vital issues for the impoverished groups.”

In a press statement issued on Thursday, the UGTT said it refuses the “unilateral commitments made by the government to the international financial circles because of the anti-social measures they include and which would result in more debt and mortgaging of the country's resources, in the absence of a fair and clear policy in the areas of tax collection and equitable distribution of wealth.”

On 19 April, Tunisia’s energy ministry announced a five percent increase in fuel prices for the third time in 2021. A litre of gasoline now costs 2.095 dinars instead of 1.995, leading to an increase in prices of many goods and services.

Tunisia’s finance minister Ali Kooli said on 5 May that he expects Tunisia to reach a deal with the International Monetary Fund (IMF) within three months after both sides finalise discussions on the size of a loan that will be provided by the latter.

The IMF — which wants Tunisia to cut wages and restrict energy subsidies to handle its fiscal crisis — said its GDP has likely contracted by 8.2 percent in 2020, being the “largest economic downturn since the country’s independence.” The IMF estimates that Tunisia’s central government debt has risen to almost 87 percent.

“The fiscal deficit (excluding grants) is estimated to have reached 11.5 percent of GDP. Revenue dropped because of a lower tax intake. Additional hiring (about 40 percent of which was in the health sector, including to combat Covid-19) pushed the civil service salary bill to 17.6 percent of GDP, among the highest in the world. Higher outlays were offset by lower investment spending and energy subsidies,” the IMF said about Tunisia in February.

Without revealing its details, the UGTT and the Tunisian government finalised a deal about economic reforms in early April. The deal reportedly covered taxation, reforms to seven state-owned firms including the airline Tunisair and the STEG Electricity Company, and policies on subsidies.

Mechichi then described it as a “historic agreement on important battles in our country”, though both parties do not seemingly agree on all aspects of the economic reforms plan.

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