Almost a year ago to the day, on June 1, 2023, he declared on Mosaïque FM that “we cannot manage the economy according to populism… There are standards that must be respected,” commenting on Kais Saïed’s meeting with academics to discuss Tunisia’s socio-economic situation.
On April 7, 2023, on another business website, Amel Belhaj Ali reported that “Fethi Nouri, an economist, said he was shocked by the statements made by the President of the Republic on Thursday, April 6! The president’s social project does not offer any alternative or economic program,” he pointed out.
He added: “This is a political response to an economic problem and the International Monetary Fund (IMF) could ask the Tunisian government for clarification. If Tunisia’s case is withdrawn from the IMF, the country could be plunged into a financial crisis, the consequences of which we cannot predict”.
Is denigrating the IMF and the rating agencies the solution?
A lot has changed since St Petersburg, where on June 7 he took part in a discussion on “the role of the financial sector in achieving strategic development goals” as part of the St Petersburg International Economic Forum.
And to hear him speak, while an IMF delegation was already in Tunisia according to our sources (certainly not to negotiate), Tunisia, which was considered a developing country (tenth richest African country in April 2024 according to an AfDB ranking), finds itself in “the galaxy of poor countries”.
The Governor of the BCT went on to say: “I cite the case of my country, Tunisia, which suffers from this difficulty of access to external financing. I don’t know why. Either we are being punished, for whatever reason, or we are being deprived of these sources of finance for our economy”.
But everyone in Tunisia knows that it is because the country has refused, and still refuses, to make the reforms that would make the Tunisian economy bankable that it is delaying the USD 1.9 billion loan it has requested.
These reforms are agreed on by the entire economic and financial community, even saying that we should do them ourselves, without waiting for the IMF.
These reforms were almost identical to what a commercial bank would demand of any loan applicant, or what would be demanded of a company in receivership, even if they were negotiated!
But he knew there was a governance problem.
And Fethi Nouri, who was a member of the BCT board at the time of the first negotiations with the IMF on the same program, still asks the question: “What are (we) being asked for? And yet we know: the IMF had accepted the Tunisian roadmap, updated by former Prime Minister Najla Bouden and the current finance minister Sihem Nemsia, with the IMF accepting it and asking only for proof of feasibility through the implementation of one or two measures to measure the degree of acceptance by the Tunisian population.
And it was the current President of the Republic of Tunisia who put an end to these negotiations on the pretext of sovereignty.
The economist Fethi Nouri, who briefed Ahmed Hachani on his trip to Russia on Tuesday, was not entirely wrong. “You have to create wealth, and that’s very difficult in developing countries. It’s a problem of lack of resources, whether natural or financial, and above all it’s a problem of governance,” he said in St Petersburg to the Russian moderator, who twice tried to interrupt him.
And we have to confirm, as he himself admitted, that the management of Tunisia’s budgetary resources, more than 44% of which is spent on salaries (figures at the end of March 2024), as opposed to investment expenditure (TND 0.631 billion), has fallen by 8.3% in the first quarter of 2024.
As a result, at the end of the first quarter of this year, the Tunisian state collected more than TND 12 billion and spent barely more than 5.2% of them to create the wealth that the governor of the BCT deplored!
The “grumbling beggar
“Getting money from the IMF. I’m not telling you anything new here, relations between this institution and developing countries are very tense. Maybe we just don’t understand each other,” says Tunisia’s official representative to the IMF and the leading financier of a country that, like the rest of the world, has been slow to comply with Article VI.
And he directly criticizes “the IMF (which) has always promoted a single type of growth, that of the rich countries, which the poor countries should imitate, to the detriment of their own needs. What’s more, it arranges the financing and decides whether or not to grant a loan in order to instill confidence in other lenders. Editor’s note: Doesn’t the same apply to Tunisian banks, controlled by the BCT, for the average citizen?
As plaintive as ever, and yet well versed in IMF practices and the international impact of its opinions, Nouri wonders, as if he had written something along these lines: “Why this condition of having an agreement with the IMF for other lenders to agree to give money to finance your economy?
And if we don’t have such an agreement, why should we be denied access to international markets? Plaintive and, in our view, mistakenly proud, he allows himself to say “we are a sovereign country”, while asking, in despair, “how do you expect my country to be able to face the triple challenge of debt sustainability, climate impact and energy transition without access to external multilateral financing, knowing that the conditions of the financial market are exorbitant and restrictive”.
Candid, he then repeats the official line that led to the break with the IMF, suggesting that “we need to review the IMF’s policy towards many Third World countries to make it fairer and more equitable, so that everyone can benefit from this mass of money that is now circulating internationally”.
This is nothing new, as a decision to redistribute SDRs (Special Drawing Rights) from “rich” countries to other IMF members has been in the pipeline for some time.
He then took aim at the rating agencies, of which there is already a Tunisian example, not to mention the credit bureau companies that rate companies, accusing their ratings of “hiding political positions depending on the nationality of the agency”.
With this conditionality, interest rates in Tunisia are now 12%, compared to between 1% and 2% elsewhere, and that hurts”. We know that one of these agencies refused to upgrade the rating of a Tunisian insurance company, despite its good results, on the unspoken pretext of Tunisia’s poor sovereign rating.
The inconsistencies of a supplicant
As for bilateral loans, “you all know that in order for one country to give money to another, it has to be in line with the donor’s policy. In a fast-changing world, you have to align yourself with the foreign policy of the donor. Either you are my friend and you follow my foreign policy and I give you money, or if you are not my friend and you don’t follow my policy and strategy, I don’t give you money. This condition of alliance cannot be in favor of Third World countries,” says Fethi Nouri, a little too pleadingly for some observers.
If not, how are we to understand at least one of the recent Saudi loans to improve the rail transport of phosphates? Or the recent visit of Eric Meyer, Deputy Secretary of the US Treasury, who met at least the Governor of the BCT and the Minister of Finance?
And, as if threatening economic disobedience by the “galaxy of the rich” that refuses to give his country money without conditions, the governor of the BCT mentions the countries that are trying to join the BRICS group in order to take out loans from his bank, but does not go so far as to formally ask Tunisia to join this group, like the 23 other countries that have already applied.
The “threat” may well have been heard, for no sooner had Fethi Nouri returned to Tunis than he was received by US Deputy Treasury Secretary Eric Meyer, who was also Senior Advisor to the IMF Board.
And the two men may well have raised the issues of budget support and Tunisia’s delay in completing the IMF’s Article VI annual review.
That review, a sort of in-depth financial audit, has always been the bedside book of any international investor or banker. A review that Tunisia now refuses to allow to be carried out, as if it had skeletons in its closet, and which explains why bilateral and even international lenders are dragging their feet when it comes to lending to Tunisia on July 25. Isn’t that right, Minister?
The governor’s good word: “We are not asking for easy, magic money”
Listening to Fethi Nouri’s 10 minutes in Russia, we feel that the governor of the BCT would have done better to present his country in a better light, one that would facilitate its access to other sources of financing, bilaterally or on the international markets, perhaps in spite of the IMF, and encourage investors to help Tunisia create more wealth and jobs.
We would have liked to see a governor who was as proud as the country’s president, at least in front of others, of what his country has achieved in terms of resilience, as the Prime Minister’s figures show, and that he gave the same speech in Petersburg as he did to Eric Meyer, accompanied by Ambassador Hood (ar). A speech in which Sihem Nemsia used the same language.
In the end, it must be said that Nouri was right to say in Russia (which also has the second largest trade deficit with Tunisia) that Tunisia “is not asking for easy money. We’re asking for money that will be useful for our development. We’re not asking for magic money. We are asking for money that we can use to develop our country.
But he had to do it with a proud sovereignty, not wrapped up in the obvious quest for a certain financial condescension. His body language may have betrayed his thoughts, but it certainly had a negative impact on his message.
