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Tunisia: Caught Between Economic Hope and Political Tension
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In the context of a political landscape marked by the July 25 constitutional referendum, Tunisia's negotiations with the International Monetary Fund (IMF) could provide a way out of the economic impasse in which the country has been immersed since the 2011 revolution.
On July 25, 2022, Tunisians voted to accept the draft of a new constitution led by President Kaïs Saïed, albeit with a low voter turnout. The draft constitution will give broad powers to the president, which could put an end to the parliamentary system in place since 2014.
On the economic front, and in the context of several months of dwindling economic opportunities, a new path forward is emerging for Tunisia via negotiations with the International Monetary Fund (IMF). While the path is certainly winding and fraught with difficulties, negotiations with the IMF could bring new lease of life to Tunisia by introducing a program of structural reforms that could prove essential to mobilizing the support of bilateral donors, historical financiers of the budget, and thus regain the confidence of private investors.
However, even if an agreement is reached soon, and a program with the IMF is signed, the ability of the IMF to quickly and sustainably restore the macroeconomic framework as well as the sustainability of public debt raises questions about the scale of the task and the poor performance of previous programs.
In this context, AFD's new publication MacroDev Flash, "« La Tunisie à l’heure des réformes : d’une négociation complexe avec le FMI à un impératif de résultats » (currently only available in French), looks at possible solutions that can help the country to emerge from this socio-economic crisis, which has been ongoing since the 2011 revolution, and exacerbated by the Covid-19 pandemic.