News / Middle East

Tunisian Jobs Dry Up as Political Crisis Drags On

Factory of Italian JAL Group that makes safety shoes is seen after it closed down due to financial difficulties in Menzel Jemil, north of Tunis, Oct. 8, 2013.
Factory of Italian JAL Group that makes safety shoes is seen after it closed down due to financial difficulties in Menzel Jemil, north of Tunis, Oct. 8, 2013.
Reuters
— 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 km (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 meager state handouts.
 
Their prospects remain bleak while ruling Islamists and the secular opposition argue over forming a caretaker Cabinet, creating an atmosphere of uncertainty and polarization 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.
 
Balancing austerity, discontent
 
The government forecasts Tunisia's economy will grow 3 percent this year and next, down from 3.6 percent in 2012 and not nearly enough to create jobs for an expanding population. Growth slowed in the third quarter to 2.4 percent year-on-year.
 
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 polarization, security risks, problems in borrowing abroad and from international donors, as well as the budget and external deficits plus the need to recapitalize leading banks.
 
The rival Fitch agency lowered Tunisia's rating by two notches last month for similar reasons.
 
Tunisia still has credits due from international lenders and, unlike Egypt, it has reached a deal with the International Monetary Fund. But Finance Minister Elyess Fakhfakh recently said the African Development Bank, a regional multi-lateral lender, had canceled a $300 million loan due to the turmoil.
 
Closing doors
 
Freed of the heavy state control of the Ben Ali era, Tunisians have staged a series of political protests, sit-ins and demands for wage increases. However, a local business chamber says the resulting instability has forced more than 150 foreign investors to close their companies.
 
Mohammed Frikha, owner of local Syphax airline and one of the country's most prominent business leaders, said protests and strikes worry investors and needed to be addressed to attract investment again.
 
Exports, which along with remittances from Tunisians working abroad and tourism traditionally bring in foreign currency, have been hit and the trade deficit reached $5.3 billion in the first nine months of this year.
 
Foreign currency reserves fell in June to 10.473 billion dinars ($6.27 billion) — equal to 94 days of imports and for the first time below the 100-day level that the central bank considers adequate. This compared with around 140 days in late 2010.
 
Despite all the problems, Tunisia remains in better shape that larger peers such as Egypt.
 
“The economic situation in Tunisia is difficult, but it is not a catastrophe. Reforms will come with the change in politics and the end of the crisis,” said Ezdine Saidane, a local economic analyst. “The economy has been hit hard but it is still possible to pull out of this.”
 
Under pressure from its international lenders, the Tunisian government has said that it is moving ahead with austerity measures including a 5 percent cut in public spending and a freeze on public sector wages in 2014.
 
The government expects the budget deficit to narrow to about 6.5 percent of economic output next year from 7.4 percent in 2013. But the IMF also wants cuts to fuel and basic food subsidies, measures which are likely to exacerbate tensions for the new government.
 
So far, three candidates are in the race for the post of prime minister for the caretaker government, including a former central bank governor, a veteran politician who served at the United Nations and an ex-finance minister.
 
But the political wrangling means little to those looking for work or to feed families. “Since the revolution, we have seen fish and meat only on television,” said Ramzi Said, 33, a building guard at a Tunis market. “We cannot buy them because of rising prices.”

You May Like

At Khmer Rouge Court, Long-Awaited Verdict Approaches

First phase of trial, which is coming to an end, has focused on forced exodus of Phnom Penh in 1975 - and now many are hopeful justice will be served More

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities More

Video Information War Rages Alongside Real One in Ukraine

Downing of Malaysian airliner, allegations of cross-border shelling move information war in war-torn country to a new level More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid