IMF complicates negotiations with Tunisia

Al-Akhbar is currently going through a transitional phase whereby the English website is available for Archival purposes only. All new content will be published in Arabic on the main website (www.al-akhbar.com).

Al-Akhbar Management

Published Friday, November 14, 2014

Informed sources at the Tunisian Central Bank and the Ministry of Economy and Finance confirmed that the Mehdi Jomaa cabinet is facing great difficulty in convincing the International Monetary Fund (IMF) to issue the $1.78 billion installment left in the credit loan because economic reforms that were agreed upon have faltered.

The sources told Al-Akhbar that the IMF expressed concern for several reasons, including the fact that the structural reforms that were agreed upon were not implemented and laws were obstructed in the National Constituent Assembly which concluded its work with most of its members rejecting laws related to the capitalization of the three national banks that were ravaged by the ousted regime of Zein al-Abidine ben Ali.

The IMF also said that the National Constituent Assembly failed to recover the large sums of money stolen by Ben Ali’s family and his in-laws, which drowned the banks in debt. Until today, they have not been able to cope with the effects of this indebtedness. In addition, the Assembly imposed other laws such as introducing an asset recovery company which was rejected by most professionals, especially people in the tourism sector who are highly indebted to the banks.

Jomaa had expressed his belief that Tunisia needs at least three years of “painful reforms” to revive its economy, arguing that restoring stable economic growth in the country will not happen without a “series of systematic reforms of economic policies” which his government began implementing. He also pointed to a number of obstacles that prevented the growth rate from reaching the level of 2.5 and 2.8 percent they had hoped for in 2014. The growth rate was significantly less than 2.5 percent according to the most recent statement issued by the Tunisian Central Bank. This means that the economic situation needs a lot of reforms and a long time to recover.

Meanwhile, Al-Akhbar learned that the National Conference for Tax Reform will be held in Tunisia in two days. It is expected that 400 people involved in financial and economic affairs from inside the country and from other countries will attend. Their mission, according to the Minister of Economy and Finance, Hakim ben Hammouda, is to discuss the findings of the national consultation regarding the tax reform system and and to prepare the final report which will issue new laws related to taxation in tunisia.

Ben Hammouda believes that a just tax law is a priority to help the economy overcome the delicate situation it is in and to, “Provide the kind of funding that could restore financial balance to where it should be without resorting to austerity measures or pressure on the consumer.

Regarding the difficulties faced by the government in convincing the IMF, the minister said that accelerating the reforms of the Tunisian banking system will be one of the major issues in the negotiations with the IMF. “It is a matter of time, and nothing more.” At the same time, he stressed that “Tunisia is one of the countries that has a special political and economic reputation and will be able to overcome its crisis... The new parliament will approve the laws that have been obstructed because there is no point in obstructing them as they will be used for the good of the country.”

(Al-Akhbar)

This article is an edited translation from the Arabic Edition.

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