Tunisian President Kais Saied appears to be constructing a new economic strategy. While he has previously outlined his priorities with broad strokes, like fighting corruption and defending sovereignty, he has recently begun to add greater detail, adopting a personalized approach that appears to be attempting to bypass the existing corporatist structures. As Saied’s efforts to recover stolen assets at home and abroad have thus far not borne fruit, he has turned his attention to trying to build an economic policy architecture in specific sectors: monetary policy, industrial policy, and some initial moves in labor policy and agricultural policy.

Monetary policy

The most significant developments thus far have been in monetary policy. Saied’s explicit rejection of an International Monetary Fund (IMF) loan with austerity conditions in April 2023 was initially mired in confusion, especially as an IMF official went on record days later to state that the program the Tunisian president was rejecting was one “designed proudly by the Tunisian authorities.” Tunisia’s own Central Bank executive board had also been claiming in its press releases throughout 2022 and early 2023 that an IMF loan was necessary — until it suddenly dropped the claim in March 2023.

Now, one year later, it appears the IMF deal is indeed off the table and more unlikely than ever. Instead, the president seems to have followed through on his promise that “the alternative is to rely on ourselves,” partly by effectively reversing — albeit exceptionally for the moment — the Central Bank independence law of 2016. That law, which crucially bars the Central Bank from making loans to the Treasury, was itself passed to meet the conditionality of an IMF loan at the time. On Feb. 7, 2024, President Saied issued Law 10 of 2024 “exceptionally” exempting article 25 of the 2016 Central Bank law. This exception allowed the Central Bank to make a 7 billion dinar ($2.25 billion), 10-year, interest-free loan to the Treasury. This injection crucially opens up new space for economic decisions without as much deference to local or international creditors and the lending strictures often shaped by international financial markets, international financial institutions, and credit-ratings agencies.

While some journalists have raised alarms about potential inflation with this move, the oft-cited warnings from ex-Central Bank chief Marouane Abassi of a new “Venezuelan” hyperinflation scenario date back to 2021 and are out of context. This is particularly the case given that much of Tunisia’s inflation, like inflation across many Global South countries, is generally imported. That is to say the rising costs of goods are driven more by higher costs of imported materials than, say, by higher wages and consumer spending. While the new funds from the Central Bank are marked to cover financing for the state’s budget deficit, Tunisia’s foreign-denominated loans seem to have been repaid from its foreign exchange reserves. Those reserves have so far weathered shocks well and maintained their relatively stable size thanks to steady exports and remittances. The credit-ratings agency Fitch recently described it as Tunisia’s “better-than-expected resilience of international reserves despite the limited availability of external funding.”

Industrial policy

While the Tunisian government has managed to so far successfully steer past a credit crisis without an IMF loan, there is the longer-term challenge of addressing the fundamentals of the economy. In this regard, it appears that the president is shaping an industrial policy that tries to stanch or reverse privatization in strategic industries, many of which were previously profitable. Much of Tunisia’s industrial sector is focused on exports, in areas such as agribusiness and factories that produce items like textiles, cables, and car and airplane parts. However, Saied has instead focused his personal visits on strategic industries that are important to domestic consumption and which have previously been sourced in part or in whole from local raw materials, including Tunisia’s only steel factory, a dairy factory, and the Kasserine paper factory. In these visits, Saied has stressed the potential for reestablishing both a form of vertical integration and profitability, a prerequisite to significantly reducing dependence on imports.

“The state must return to steel,” Saied said during his recent visit to Tunisia’s steel factory, adding that in the past, “everything was for sale.” “We want to build our country with our resources, through our choices … by ourselves, and we will not sell our country to anyone,” Saied stated, echoing some of his political speeches when he frequently invokes the restoration of sovereignty. In the videos of his visits to local factories, Saied appears to think out loud about the factors that prompted or threaten the default and bankruptcy of state-owned enterprises, as well as speculating as to how the arcane legal and administrative processes of bankruptcy have been victims of corruption. In these, he has targeted specific businessmen, but he is also exerting pressure on private businesses and their interest groups like the Tunisian Union of Trade, Industry, and Handicrafts (UTICA) — what the president’s critics have termed his “demonization of the private sector.”

Labor policy

Normally, UTICA and the Tunisian General Labor Union (UGTT) have both played their roles in shaping a corporatist mode of governing, but the president appears to be trying to bypass them. Several UGTT leaders have been arrested in recent months, sometimes released after protest and pressure by unionists. The new pressure on the UGTT is also matched by the president’s championing of initiatives aimed at addressing workers’ demands, undercutting the UGTT’s role as an intermediary.

For example, Saied recently called for the end of the subcontracting system and short-term employment contracts by reforming the labor code. The labor contracting system in Tunisia’s manufacturing industry is currently set up to allow big multinational brands to subcontract to local factories — or more recently, in yet another layer of subcontracting, to household sweatshops — which hire workers on continually renewed short-term contracts or no contracts at all under highly exploitative and precarious terms. This problem has a particular impact on women workers in industries like textiles. Normally, under the corporatist model, it would be the UGTT rather than the president who would advocate for the rights of these workers. But declining union membership in manufacturing in recent decades points to a structural void in the UGTT’s capacity to uphold the corporatist model. So it seems the president is stepping in to present himself as the voice of the working class through a more direct political model, or what many critics would refer to, often pejoratively, as “populism.”

Agricultural policy

Agriculture remains the sector with the most pressing issues and is perhaps the most difficult to resolve politically. While President Saied has attempted to formulate a policy around agriculture, that policy remains unclear in terms of overall strategy, implementation, and effect. Saied has promoted “Communitarian Enterprises” (CEs), especially for women agricultural workers, and sold these as a path to food sovereignty and local development. This is a new category of company that Saied introduced in March 2022, apparently drawing on the Social Solidarity Economy (SSE) framework set up in previous legislation that softened the state’s formerly punitive regulatory strictures against atypical cooperative structures. The model for that legislation was partly to account for the Jemna association’s pioneering role in the field of agricultural cooperatives.

However, some analysts have argued that the key difference between the new CE and the SSE law is that CEs do not enjoy managerial autonomy and thus are likely to resemble the 1960s cooperative project run by Ahmed Ben Salah. So far, some agricultural workers have expressed hope that the new system promoted by Saied will produce tangible material benefits. But the potential of CEs to resolve more fundamental problems facing rural workers, let alone bigger questions of power and justice in areas like land ownership and usage, remains ambiguous, as initial studies have already indicated.

While some of the economic directions taken by President Saied may appear ad hoc — not necessarily sprouting from a clearly articulated theoretical vision — they nevertheless belie a longevity and consistency that are accumulating into cohesive new policies. This is reinforced and facilitated by the concentration of power in the seat of the presidency that Saied has effected over the last three years. For now it remains too early to assess the success or failure of these policies.


Fadil Aliriza is the founder and editor-in-chief of Meshkal.org, an independent news website in English and Arabic covering Tunisia, and a Non-Resident Scholar with MEI’s North Africa and Sahel Program.

Photo by Tunisian Presidency/Handout/Anadolu Agency via Getty Images

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