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Tunisia: Economic reforms should be accompanied by social reforms (Jihad Azour)

The economic reforms adopted by Tunisia should be accompanied by social reforms to ease the pressure on vulnerable groups, said Jihad Azour, Director of the Middle East and Central Asia Department of the International Monetary Fund (IMF).

In an interview with TAP, the official said the Tunisian government is on the right track, adding that reforms require time and support. In this context, he expressed the will of the IMF to support the efforts of the Tunisian government in this area, while taking into account the reaction of the citizen who has not yet felt significant improvements in his situation.

“In Tunisia and the Arab region, it is necessary to raise the level of growth to a level between 5 and 5.5% in order to allow these countries to solve existing problems”. Besides, he emphasised the need for a participatory development approach that will benefit all social groups, including the most vulnerable, such as young people who, in some of these countries, face unemployment rate of up to 25%.

// Question: With the support of the IMF, Tunisia has started implementing a 2nd reform programme, but it is still unable to boost growth, investment and employment. What are the obstacles to achieve these goals?

// Answer: The level of growth in Tunisia is still the main obstacle to job creation, which must be the top priority.

We must not forget that the difficult transition through which the country has passed has posed several challenges related to the repercussions of terrorist operations, particularly on the tourism sector.

The Tunisian people and government are making considerable efforts to ensure stability in a difficult environment characterised by the increase of the budget in recent years.

This situation requires a control of public expenditures to enable the State to mobilise part of the budget to support social provisions and investment in young people and job creation.

In all countries of the world and not only in Tunisia, the transition process takes time and it is normal that the citizen does not feel the results of this effort on his everyday life.

Governments are expected to ease the pressure of reforms through social programmes targeting vulnerable groups.

// Question: In a situation where the financial resources of the Tunisian state are increasingly scarce, what measures must be taken to make social reforms a reality?

// Answer: As I have already mentioned, the State is called upon to alleviate the impacts of economic reforms on vulnerable groups through the implementation of social programmes aimed at guaranteeing direct financial support targeting certain categories.

In this same context it must be emphasised that the fall in the unemployment rate is the main target of the reform programmes, especially since the creation of job opportunities requires an improvement of the basic infrastructure, the modernisation of the climate of business and private sector incentives.

The other social aspects concern, in particular, social security coverage to enable citizens of all ages to feel protected. Indeed, it is essential to implement reforms targeting social security and the pension system.

The Tunisian government is on the right track, but the reforms require time and support. And it is for this reason that we work to support these efforts, while taking into consideration the reaction of the Tunisian citizen who has not yet felt any noticeable improvement in his situation.

In addition to financial support, we are ready to provide technical assistance to enable Tunisia to implement these reforms.

// Question: Tunisia has decided to raise taxes to mobilise additional revenues, which will certainly raise the company’s production costs, discourage investment and limit job creation. Tunisia, is not in a vicious circle, with a lack of investment, on the one hand and a decrease in recruitment in the public administration, on the other ?.

// Answer: I think the investor does not focus only on tax pressures. There are the administrative procedures and the quality of the infrastructure.

Another concern of the investor is economic stability, because if inflation is high and the budget deficit increases, the trust factor will be shaken.

The government is called upon to put in place comprehensive policies that should not be based on one or two provisions.

// Question: Do you think that Tunisia is able to succeed in its economic reform programme as it is the case at the political level?

// Answer: There is a will in Tunisian society to ensure the success of economic reforms and a growing awareness among Tunisians, especially young people of the need to implement reforms in order to get out of the current situation.

Currently, the outlook is positive, especially as Tunisia should benefit from the improvement in the level of growth in the world, which has involved partner countries in Tunisia, notably the European Union, which will allow an improvement in economic growth in the country.

TAP

 

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