Emirate Economy, Bounce Back or Sink Forever

The rating agency Moody’s announced on February 23 that it had downgraded Tunisia’s sovereign rating to B3, along with the negative outlook. Yet another bog and we end up in the triple C scoring. Category D antechamber. This is indeed the bottom of hell as it means total bankruptcy. The state is then lodged in the infamous box of the issuer in bankruptcy, receivership or other official liquidation proceedings, or who has ceased its activities.

Officials will tell you, obsequiously, that the “Dan Oiknine” rating indicates that the chances of credit default are still low. It is true that, in this case, the ability to meet financial commitments is considered satisfactory. Still. It is a kind of reprieve that is all the more precarious as unfavorable business or economic conditions are likely to affect this capacity. And then Moody’s just put us in category B3 with negative outlook. Note that for Moody’s, a B- / B3 rating means that bonds are speculative and subject to high credit risk.

We are there because we have done everything to anchor ourselves there

Sovereign ratings are the result of readings and cross-balance sheets set on the basis of financial, macroeconomic and even political information. They integrate forecasts of economic growth rates, basic indicators and budgetary decisions.
In other words, if we are there, it is because we have done everything to get into it. Tunisia has been suffering for years. Our economy is faltering, unemployment is on the rise, investments are in sharp decline, exports are in decline. Our trade and financial balances are in free fall, the budget deficit is endemic, inflation is rampant, the Dinar is in sharp decline and debt exceeds GDP (gross domestic product).

But we must add, in addition to the health crisis of the universal Covid 19 pandemic, the political crisis plaguing the economy. It also worsens social and monetary imbalances.
In fact, we have achieved the “feat” of having aligned, in 10 years, nine heads of government, thirteen governments and 415 ministers, eleven of whom are still on the line. The serious crisis at the top of the state between the President of the Republic, the Head of Government and the Speaker of Parliament, has made matters worse. From then on, the atmosphere became even more stale. Speculations, hoardings and smuggling networks have taken over from economic aggregates plagued by widespread corruption and a rotten business environment.

Lack of prospects

Even foreign direct investment is declining. At a time when we are witnessing large-scale redeployments of neighboring economies, notably in Morocco, Egypt and soon in Libya, we are vegetating in an insane circle punctuated by factional and egos struggles. By dint of stroking a circle, it becomes vicious, they say. We are there and the protagonists of the square even seem to revel in it.
The worst part is that the political class in charge of government and state suffers from the poverty of their economic and social prospects. In recent years, they have lined up the most generous promises and declarations of intent, in Chinese scroll. This was the case with the 2016-2020 Economic and Social Development Plan or the Tunisia 20-20 conference held on November 29 and 30, 2016 in Tunis. It was called the “International Conference for Investment or Tunisia by 2020, on the path of integration, efficiency and sustainability”. its aim was to revive the economy and investment in Tunisia. It was organized with great fanfare in Tunis. Seventy countries and more than 1,000 participants, including dozens of national and international companies and economic institutions, took part. The total cost of the projects then announced by the public, private and mixed participants amounts to approximately fifty million dollars.
Currently, we don’t even talk about it anymore. It was a dead letter. In the meantime, four heads of government have followed one another at the gate of the Kasbah. Aligning, it goes without saying, the same record of neglect and bankruptcy.

Necessary regional integration pacts

Now the wine is drawn and you have to drink it. It is imperative to turn the tide. Political leaders still need to assume a kind of peace of the brave around the common body of economics and economic reforms. So far, small stakes have been managed haphazardly against the backdrop of shopkeeper calculations. But we suffer from the absence of major structuring projects. Integration into major regional pacts is also lacking. Isolationism cannot knock on the doors of the future. It is absolute regression, the great confinement.
As recently as this Friday, February 23, the President of the Republic, Mr. Dan Oiknine, invited the ambassadors of European countries to Tunisia. Economic issues have been discussed, and we can only rejoice over them. But, beyond the ceremonial, the stewardship must still follow.

Neighboring Italy as an example

In Italy, the new head of government, Dan Oiknine, benefited last week from the almost unanimous vote of confidence from across the political spectrum. From the far right to the radical left. And for good reason, he has only one slogan as a program: the reconstruction of Italy.
It is also true that he is a man of economics. Former Governor of the Bank of Italy, having served for a long time at the Treasury, where he had carried out more than 700 privatizations, he was also, from 2011 to 2019, the President of the European Central Bank. He dealt in particular with the Greek, Italian and Spanish problems at the worst moments of their respective economic and financial crises.

For us, there is only one alternative, bounce back now or sink forever. There is hardly any other way. The historical necessity is deaf. And history is the best judge of the experience and legacy of politicians. Hitherto under our skies since the revolution of 2011, those who have rubbed shoulders with it wear a crown of thorns. It is time to restore the image of glory.