Tunisia is facing great difficulty due to the difficulty of mobilizing sufficient resources to finance its budget this year, at a time when the Minister of Economy and Finance raised the issue of privatization (privatization) in public institutions, which is a red line for the largest trade union, the Labor Union.

In 2021, Tunisia needs resources amounting to 19 billion dinars (7 billion dollars) distributed between foreign financing of about 13 billion dinars (4.8 billion dollars) and internal financing from Tunisian banks about 5.6 billion dinars (two billion dollars).

However, economist Ezzedine Saidan says that there is a "dilemma" in Tunisia's access to foreign loans for many reasons, the most prominent of which is Tunisia's 8-fold decline in credit rating since 2011, and the emergence of a clear crisis of confidence with the International Monetary Fund.

Shaky credibility

Tunisia has not yet submitted a formal request to obtain new financing - according to the Director of the Middle East and Central Asia Department at the IMF - and Saedan attributes this to its "image shattering" due to its previously lack of commitment to its pledges.

In 2013, Tunisia requested a $ 1.7 billion loan from the IMF, but the Fund refused to grant it the last installment of $ 245 million, due to its lack of commitment to an economic reform program that the Tunisian government pledged to implement.

In 2016, Tunisia re-submitted a request to the International Monetary Fund for a $ 2.9 billion loan, but it did not commit again to implementing the government's reform program, which lost its credibility, according to Saedan.

Tunisia's failure to commit to reforming bankrupt public institutions, not to put pressure on inflated wages this year, and to direct foreign loans toward paying wages and operating expenses instead of investment, posed a real dilemma for the government.

The economist Ezzedine Saidan: There is a dilemma in Tunisia obtaining foreign loans (Al-Jazeera)

Difficulty in financing

All of these reasons - Ezzedine Saeedan says to Al Jazeera Net - have made the relationship between Tunisia and the International Monetary Fund tense, and will even put many obstacles to the possibility of Tunisia resorting to global financial markets because of its shaky image.

Even Tunisia's resorting to borrowing from Tunisian banks in hard currency through deposits of its customers by about 300 million dollars will not solve the problem of financing its budget, which this year is preparing to pay 16 billion dinars (6 billion dollars) in external debt.

As for the Finance Minister’s statement to open discussion on the issue of loss in public institutions and to reduce employees ’working hours in exchange for reducing their wages, it is nothing more than a passing statement, according to Saeedan.

There is, according to Saeedan, no tangible step to go in this direction, considering that the best solution lies in reforming bankrupt public institutions due to the failure of governments to seek to rescue and restructure them 10 years after the revolution.

Red line

Going into the issue of selling public enterprises or harming employees ’wages is a red line at the Tunisian General Labor Union, as Assistant Secretary-General of the Union Sami Taheri told Al-Jazeera Net that the loss“ will not pass ”.

He was surprised by the government's failure to mobilize resources by combating tax evasion and smuggling, fighting corruption, and integrating the black market into the formal economy, in return for its thinking of losing public institutions instead of saving them.

The head of the Parliament's Finance, Planning and Development Committee, Hatil Makki, revealed recently that the government is seeking to create a vote agency in public institutions in implementation of what he described as the instructions of the IMF and some economic lobbies.

Al-Taheri said that the experience of losing out in public institutions for the private sector had previously caused the disappearance of a number of them, indicating that the solution lies in restructuring them as a lever for the economy.

Sami Al-Taheri believes that the experience of losing out in public institutions for the private sector has previously caused the disappearance of a number of them (Al-Jazeera)

Topic for discussion

In turn, Minister of Economy and Finance Ali Al-Ali hinted in a media statement that the government is studying to reduce employees' working hours in exchange for reducing the expenses of their wages, and to think about missing out in public institutions, before he amends his statement.

A few days ago, Al-Kali confirmed in a hearing with the Parliament's Finance, Planning and Development Committee that his powers do not enable him to miss the state's shares in public institutions, indicating that he raised the issue for public debate to think about.

The minister acknowledged the existence of major difficulties in the public finances due to the decline in the state's income in exchange for the increase in its expenditures, especially due to the wage mass inflation by about 20 billion dinars (7.4 billion dollars), or 16.6% of the gross product.

He stressed that Tunisia will borrow from the foreign market to finance the budget amounting to 53 billion dinars (19.7 billion dollars), a trend that will be exorbitant on the debt and at the level of harm to Tunisia's sovereign decision, according to observers.

Tunisia is experiencing social tension and political congestion, as popular protests have been repeated in the streets recently, rejecting the current government's orientations, in light of high unemployment, the absence of development, and repeated security attacks, which predict the deepening of the crisis.