The Tunisian head of state has finally spoken about the economy. This is the first time this has happened during Saïed’s term in office, and it may be a sign that he has finally realized the urgency of the economy in relation to his political concerns, and that he is willing to spend four hours discussing it with real experts, even if they remain mere theoreticians.
This presupposes that the head of state, as an economic and financial novice, remains open to the possibility of changing his way of thinking.
An 86-year-old example
On May 31, 2023, he invited a group of 15 academics of his choice, most of them unknown except for Abdelkader Boudriga, Ridha Chkoundali and Fatma Charfi, to “find solutions that are truly Tunisian, that come from the will of the people (…) and that pave the way for the future.”
These solutions are summed up in the 86-year-old cartoon showing Tunisian youth sweeping aside old heads and development literature to pave the way for the new Tunisia. The President will certainly present the document from another time in a different light, in connection with foreign diktats and “heads with heaps of rubbish” that the Tunisian youth would like to sweep away, according to the cartoon’s caption, but where Saïed sees instead “people who have nothing to do with numbers”. And I’m sure everyone got the parable!
A frightening parable cartoon
But also, in our opinion, a parable cartoon that could say a lot about the economic intentions of the Tunisian head of state, whose cabal against businessmen and all private economic actors is well known, as during his muscular visit, full of verbal threats, to a concrete iron factory in 2022, or against the distribution channels, which he described as “channels of impoverishment and hunger.” Or also his call for judicial conciliation because he is dissatisfied with the results of the IVD (Truth and Dignity Commission). A cartoon, then, that will certainly please Kais Saïed’s “people want”, but is unlikely to reassure the current Tunisian entrepreneurial class.
A consultation reminiscent of another
All this, however, was achieved in a meeting whose format and content, deliberately kept secret, were reminiscent of the consultation he held in 2022 with a select handful of jurists, to whom he paid little heed, to decide on his own constitutional choices for his own republic.
The 2022 consultation, however, had defined Saïed’s political project for the Tunisia he wanted. And some of his guests, such as Sadok Belaïd and Amine Mahfoudh, denounced the conclusions Saïed drew after this consultation. The 2023 consultation will undoubtedly define his economic project and the development model that the Tunisian head of state wants to implement.
Saïed in line with Tabboubi and Ben Salah
In passing, Saïed reiterated that “we will not accept any diktat from abroad”, in reference to the economic reform program that his head of government has presented more than once to the IMF. Then, like the UGTT general secretary before him, Kaïs Saïed drew a red line around state-owned enterprises (SOEs), stating that he would not sell any of them. In 2019, the debts of public enterprises to the state will exceed 6 billion dinars, and the 110 public enterprises managed by the Tunisian state, which receive 8.9% of GDP (2020 figure) in operating subsidies, record average annual losses of 400 million dinars. And this will continue at the expense of the taxpayer.
And in response to those who accuse him of creating a new economic model based on the public sector, Saïed speaks of entrepreneurship, citing as an example the creation of civic or communitarian companies for the unemployed.
Saïed would thus be repeating the ill-fated economic project of Ben Salah in the 1960s, who had gone so far as to create a Higher School for Cooperatives. Ben Salah had gone so far as to set up state distribution networks, notably with “La Cop”, a popular memorial from the 1960s.
No removal of subsidy, but a tax for those who do not deserve it
Nothing has been said (as always with Saïed) about the content of the Tunisian Head of State’s discussions with academics, apart from this statement by Ridha Chkoundali to the effect that “the President of the Republic has proposed a tax to be paid by those who benefit from the system of subsidies without deserving it. This will go to the General Subsidy Fund, so that they can continue to benefit from it”.
The IMF backed the Bouden government’s proposal to phase out subsidy. With Saïed’s proposal, we understand that he does not want to remove subsidy for any category, but to impose his rebate by means of a tax on those who do not deserve it. This could be found in a new tax in the income taxes and on the backs of the middle classes and certain trades such as hotels, restaurants and others, in the 2024 Finance Act. And we think this is just the beginning!