IN CASE anyone thought Islamists only dealt in ideology, Tunisia’s government, headed by the moderate Islamists of Nahda, was keen to show its attentiveness during a recent visit by Joseph Stiglitz, formerly the World Bank’s chief economist and an adviser to the Clinton administration. Sharing a platform with the prime minister, Hamadi Jebali, the finance minister, Houcine Dimassi, and the central bank governor, Mustapha Nabli at an event on June 23rd, Mr Stiglitz hinted that Tunisian policymakers should resist the temptation to create too many public-sector jobs, and should target subsidies.
Mr Nabli (pictured), who has also worked at the World Bank, took up his role at Tunisia’s central bank immediately after the revolution that overthrew President Zine al-Abidine Ben Ali in January 2011. He took the opportunity of Mr Stiglitz’s visit to
- assert that it had been his “flexible” monetary policy, in those rocky months after the revolution,
- which had saved Tunisia’s banking sector and its tiny financial markets from meltdown.
- More than $400m of bank deposits had been withdrawn in those early months, he said.
- The central bank had also come to the rescue, he added, when local authorities faced a cash crunch after the ousting of regional governors, mayors and councillors by the populace.
This sounded like a swan-song, and so it proved. Mr Nabli’s long-rumoured dismissal was announced on June 27th, and will take effect within a fortnight after its approval by the constituent assembly.
- Journalists critical of the government—of whom there is no shortage in Tunis—have construed his dismissal as politically motivated and the latest example of the Islamist-led government’s ignorance of the ways of the world.
- It will be difficult, it was argued, to find a replacement with Mr Nabli’s international credibility and one who will so trenchantly defend the central bank’s independent decision-making.
Mr Stigliz’s endorsement of his fellow World Bank alumnus had been polite rather than enthusiastic. And as someone who had served as a minister under Mr Ben Ali in the 1990s, Mr Nabli was never going to be viewed with much enthusiasm by the Nahda-led government that was elected last October. There have also reportedly been differences between a central bank committee and other policymakers over the best way to manage assets confiscated from Mr Ben Ali and others implicated in the corruption of those years.
Meanwhile, Mr Dimassi, the finance minister, has been warning for months that jobs created as part of a government effort to deal with youth unemployment will have to be real ones—and not just the tens of thousands of positions that are part of the dramatically expanded “chantiers” (“work-yard”) schemes presently biting into the current account. These offer unskilled, temporary work in forestry, road construction, cleaning of government offices etc, and received extra funding under the interim government of Beji Caid Sebsi last year. Not all the funding, it seems, has been reaching its intended targets.
As pockets of instability persist in regions where unemployment is highest,
- Tunisia’s conservative, family-owned industrial groups are holding back from investing there.
- Some of them also await clarification from the authorities as to whether they face prosecution for dealings with the former regime.
- But until Tunisian companies themselves start investing in these marginalised parts of the country, foreign investors will likewise hold back.
Source : The Econmist, Jun 28th 2012,
Link : Tunisia’s economy : Losing direction