IMF: Tunisia must implement profound reforms and cut public employment

Jerome Fasche, representative of the International Monetary Fund in Tunisia stressed that this country, in search of international sources of financing, must carry out “very profound reforms”, especially by reducing the size of the public sector, which is “one of the highest levels in the world”.

Fashe noticed with the turn of the years His three terms, in an interview with Agence France-Presse, indicated that Tunisia knew, due to the Covid-19 pandemic, “the greatest economic recession since its independence”.In 1956. Ma stressed that “the country’s problems were a precedent (for the pandemic), especially the budget deficit and public debt (at the end of 2021 it reached about 100% of GDP), which were getting worse”.

After GDP plummeted by around 9% in 2020, growth has returned to just over 3% in 2021 and the same percentage is projected to be in 2022.

Fasche considered that growth “remains weak and largely insufficient” to absorb the unemployment rate, which exceeds 18%, and “high even among young graduates”. But he stressed that “the skilled workforce, the highly qualified human balance and the appropriate geographical location” are factors that constitute the winning cards for the country.

Since its formation last October, more than two months after President Kais Saied’s decision to freeze parliament and remove the government on July 25, Najla Boden’s government has called for a new assistance program from the International Monetary Fund.

But Fasche stressed that the talks are still on in a preliminary stage, as the International Monetary Fund wants to first “know the intentions (of the authorities) in terms of economic reforms, because there is a need for very profound structural reforms “.

He added that there is a need “for a solid and reliable program ( .) in the medium term and to be presented to the people even if this requires an explanation of the difficulties”.

However, he felt that “since there is a technical effort in course “by the government and” there is an awareness of the main challenges and major problems, this matter forms a good basis for preparing and adhering to a reform agenda. “

Tunisia
Tunisia

Vasche listed urgent issues, including the “heavy weight” of public sector employees (16% of GDP), as the salaries of 650,000 official employees account for more than half of the state’s annual expenditure “not counting local authorities and companies public “.

private situation

Fasche said that this “particular situation” in Tunisia “where the mass of wages in the public service is one of the largest in the world”, also compared to the situation in Egypt, Morocco, Lebanon and Jordan, prevents the country from increasing “future expenditure and investments, expenses and investments for education and health “.

Another urgent issue is the launch of a “profound reform of public companies” operating in the various sectors of communications, electricity, drinking water and air transport, which often enjoy a monopoly and employ at least 150,000 people.

The International Monetary Fund official stressed that “a great effort must also be made in terms of effectiveness in relationship to what people expect in terms of public services “.

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