Economist and former finance minister Hakim Ben Hammouda believes that the level of growth that should be achieved this year is far from enough to advance in the economic transition.
In an interview with TAP, he spoke about the economic balance sheet of 2017, noting that the year 2018 will be crucial to avoid stagnation in the crisis.
What assessment do you make of the economic balance sheet of the year 2017?
Admittedly, 2017 has seen an improvement in economic growth, which should be around 2%. But, this performance is insufficient and does not allow to advance in the economic transition and even less to bring back hope in our country and especially among young people.
I think it is worth mentioning that from 2015, the national economy has suffered a great deal of weakening of the economic situation.
Growth was down and did not exceed 1%. And while there has been a slight recovery this year, growth remains weak and below expectations.
In addition, the economic situation is marked by a deterioration of the country’s major macroeconomic balances with an unprecedented crisis in public finances and a historical deficit of the current account.
It should also be noted that there are difficulties in implementing reforms and delays in this area, in addition to the issue of unemployment, which has remained at very high levels.
Therefore, the recovery of growth, macroeconomic stabilization, the acceleration of reforms and the fight against unemployment remain the biggest challenges to meet. While we have made progress in the political transition, economic transition remains uncertain.
What are your comments on the current level of key financial and economic indicators?
I think the country is going through the worst crisis in its history of public finances with a structural imbalance of public finances resulting in a rapid increase in spending and a slower rate of revenue growth.
This situation has created an abysmal deficit of public finances since the revolution and has been behind the rise in internal and external indebtedness.
The situation of public finances in Tunisia is central and its control will largely depend on the economic transition.
Macroeconomic imbalances are not limited to public finances. They have also affected the external balances with a deficit in the trade balance, which capital movements are no longer able to fill. Today we have a major current account crisis.
The fiscal and current account deficits explain the urgency of stabilizing the macroeconomic framework.
However, stabilization does not mean austerity policies. On the contrary, we must continue our recovery effort in order to support growth and restore the equilibrium of our economy.
The year 2017 saw the adoption, in April, of the five-year development plan (2016/2020). What analysis do you make of this plan? Is it a clear economic vision?
Our country has suffered from the lack of a clear economic vision and a coherent economic project since the revolution.
The development of an economic vision was necessary to bring coherence to economic policies.
However, this plan suffers from two major difficulties. The first concerns the inadequacy of the five-year plans with the economic policy.
These are rather outdated and no longer represent the framework for formulating economic policies.
Today, countries are leaning more towards long-term strategic visions over ten or fifteen years and then define rolling three-year budgets.
However, our great paradox in Tunisia is that we opted for rolling budgets as part of the reform of the Organic Budget Law that will be discussed in the parliament soon while we cling to the concept of the five-year plan. A paradox that we must settle.
The second difficulty for this plan is that it is no longer in the news of public action. It’s as if it was Habib Essid’s government plan and disappeared with him. Neither the 2017 Finance Act, nor that of 2018, referred to this development plan.
I believe that we must put ourselves in the world’s time and out of anachronism and endow ourselves with a long-term strategic vision, which will be translated into a rolling budget over three years.
The year 2017 was also marked by several social protests, especially those that took place in the southern oil fields. What is your reading of the social order in the country during the year 2017?
These mobilizations have weighed on the economic situation of the country. But, it must also be said that these protests are the expression of a certain laxity after so many promises to take into account the realities of interior regions and which have not been realized. Real projects must be put in place to meet the demands of these regions.
In view of all that you have just mentioned, how does the year 2018 look?
The year 2008 will be, from my point of view, crucial. The prospect of stagnation in the economic crisis must be avoided by greater daring in public action and in economic policies.
What are the priority issues that the government should embark on early in 2018 to hope for an improvement in the economic situation?
Three priority issues require government attention. First, macroeconomic stabilization. Then, the revival of investment and growth and finally the acceleration of the pace of reforms.
Is the 2018 Finance Law likely to encourage recovery?
The 2018 Finance Law has attracted much criticism from experts and major national institutions such as UTICA.
For my part, I consider that the assumptions used for this finance law are too optimistic and we will certainly have to consider a supplementary finance law before the end of the year.