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Tunisia: Now unsuitable for investment?

On Wednesday, March 17, 2021, Prime Minister Hichem Mechichi said “the economic situation of the country is very serious and requires the establishment of a political climate conducive to economic recovery, through economic reforms.

The answer came on the same day from the UGTT to the government: “The situation announces a bankruptcy … and there is no question of touching the wage bill.

The statement and answer were made amid a financial situation close to the Shutdown in a zombie economy that is indebted to pay the salaries of civil servants and import its food and phosphate in a country that is producer. All this, with a Constitution where strikes and sit-ins, for anything and everything, for one’s own demands and in support of those of all the others have become absolute rights, and not regulated by law.

The link is clear, between rise of social protests and fall of FDI

The number of protest movements in February 2021 increased by 42% compared to February 2020, reaching 1,235 protest movements against 705 in February 2020. The figure was provided by the Tunisian Forum for Economic and Social Rights (FTDES), which on Monday presented its February 2021 report on social protests, suicide, violence and irregular migration.

Protests demanding employment accounted for 34% of the total number of movements, followed by labor protests calling for the settlement and improvement of work situations, which stood at 24%. These are two types of protests, with direct financial impact on the budget of the Tunisian state.

In the same Tunisia, and according to figures from the Central Bank of Tunisia (BCT), FDI (Foreign Direct Investment) accounted for almost 4% (3.9%) of GDP in 2019, and represented only 2.2% in 2014. Figures from the Foreign Investment Promotion Agency (FIPA), report a decline of 28.8% of FDI in Tunisia between 2019 and 2020, and 34.2% between 2018 and 2020.

Neither the BCT nor FIPA will say so, but the link between the rise of social protests and FDI is direct. According to the same FTDES, the main modes of protest in Tunisia have been sit-ins and roadblocks, and have even involved the Administrations and production sites.

Protests, in organized gangs, in brick walls built on the railways, students who spend nights and days in the halls of the ministries, deputies also who prevent any adoption of laws.

These social protests, more and more hard, are faced with the laxity of a state where governmental instability has been the rage for more than a decade, and which scare away investors, of whom only the figures of unfulfilled promises remain.

These protests make that Tunisia is no longer land of investment, despite its urgent need for this kind of capital. And what applies to FDI, applies to local investors, with a few exceptions!

From South-West to North-East, everyone protests and does not let anyone invest

At FTDES, Ben Romdhane confirmed that the various governorates of the Republic have lived during the month of February under the impact of protests.

The South-West region recorded the largest number with 370 protests, followed by the Mid-West with 332 protests, the North-East with 214 protests and the South-East with 136 protests.

The Mid-East saw 116 protests and the North-West 67. Gafsa ranks first in terms of protests and demands, where 265 protests took place, which represents about 21% of the total demonstrations experienced by the country in February, followed by Tunis with 158 protests.

Kasserine and Kairouan follow with 143 protests each and Tataouine with 75.

According to the results of the Tunisian Social Observatory, sit-ins are the most common form of protest, totaling 925 days of sit-in recorded.

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