Every morning, in one of the cafes of Tunis along the famous Avenue Habib Bourguiba, employees gather to read the daily newspapers and discuss the top news in their country, especially economic news, before starting their working day.
In al-Kawn café one of the visitors gives a sarcastic whoop, drinks a glass of water, then claps his hands and says: “We are living in a country with 6,500 millionaires! And our economy is still on the verge of bankruptcy.”
Every morning, in one of the cafes of Tunis along the famous Avenue Habib Bourguiba, employees gather to read the daily newspapers and discuss the top news in their country, especially economic news, before starting their working day.
In al-Kawn café one of the visitors gives a sarcastic whoop, drinks a glass of water, then claps his hands and says: “We are living in a country with 6,500 millionaires! And our economy is still on the verge of bankruptcy.”
Many Tunisians are confused and disturbed by the daily economic reports declaring Tunisia’s fragile economy—on the verge of collapse— contrasted with the growing numbers of wealthy Tunisians.
Chedly Ayari, Governor of the Tunisian Central Bank, said the financial situation in Tunisia is dangerous. He added that the difficult situation may oblige the state to stop meeting its financial obligations, such as paying government wages in the coming months.
The UK-based New World Wealth Magazine, which covers news on wealth around the world, listed Tunisia at the top of the Maghreb countries with the most number of millionaires—6,500 people have personal wealth of more than US $1 million, 70 billionaires, with each having assets of more than US $1billion. Tunisia has also ranked among the top ten countries in Africa in terms of the number of wealthy people.
The ranking determined a person to be a millionaire if his assets totaled US $1 million, excluding the ownership of land and property.
Top 10 wage earners
Enterprise Magazine revealed that in Tunisia there are 10 top wage earners, based on their annual salaries. The wages ranged from a maximum of 89,000 dinars (US $53,000) per month (paid to the General Manager of the La Carte Group), 52,000 dinars (US $30,900) monthly (the salary of the Deputy General Manager of Aman Bank) and 44,500 dinars (US $26,500) monthly (the salary of the Director General of the Trade and Industry Banking Federation).
These numbers upset the ordinary citizen in Tunisia, especially after a revolution against oppression, injustice and social and regional inequalities. The food prices’ indicator has continued to rise month after month, according to the National Institute of Statistics. Wages earned by employees are no longer enough to cover their basic needs. Moreover, there are many warnings voiced by various actors, the labor organization as well as the Tunisian Union of Industry and even by economists who believe that the country’s economy is about to collapse.
Wided Bouchamaoui, President of the Tunisian Union of Industry, recently reported in a press conference that the middle class, which long characterized the Tunisian society, is heading towards extinction.
Governor of the Central Bank Governor recently reported that consumer prices witnessed another rise in the month of August 2013 reaching 6.4%. This increase in consumer prices is mainly due to the presence of influential factors such as the high demand for raw materials like grain, fuel and fertilizers, as well as to the weakness of the state and the absence of strict control on prices, which are manipulated by merchants.
He added that this has resulted in a decline in purchasing power, despite attempts to control high prices and speculations which particularly affect low-wage earners more vulnerable to the increase in prices. They have been forced to reduce their expenses and thus buying fewer goods and food items, or resorting to parallel markets, which sell at relatively lower prices. Most of the products in these markets are smuggled and they pose a threat to consumers’ health.
With unemployment on the rise and austerity measures announced, the ordinary citizen is confronted with very visible disparities. The salary of the president is about 45 times the average wage in Tunisia.
A dangerous situation
In a report issued recently, the World Bank warned that the slow economic growth in the Middle East and North African countries is dangerous. The report considered that the conditions in Egypt, Tunisia, Lebanon, Jordan and Iran are the most alarming because of fiscal deficits, high debt, high unemployment rates, inflation and the continued recession. According to the report, the reasons behind these conditions are economic recession and the prevailing turbulent conditions.
All data suggests that the economic sectors in Tunisia have suffered because of the prevailing political, security and social conditions in the country, which has had its impact on the recorded growth rate in the first quarter of the current year. All figures have shown that the growth rate did not exceed three per cent. This warning is not a surprise because the crisis has had its impact on all fields, especially on foreign investments due to the closure of many foreign and local institutions.
Thus, the figures released on the number of wealth owners can easily shock the ordinary citizen who knows well that his country needs investments to save its collapsing national economy.
On the other hand, many economic experts and observers consider what is going on to be completely normal. They believe that these figures are rational if one takes into consideration that some of the wealthiest people have investments outside Tunisia because the country’s economy in recent years was staggering, in addition to the decline in the exchange rate of the Tunisian dinar against other currencies. This is not to mention corruption, which allows people to accumulate large amounts of wealth in a relatively short period of time.
International economic institutions, concerned with measuring competitiveness and financial transparency, have ranked Tunisia among countries where financial corruption is widespread, especially after the revolution and during the transitional phase. Belgium recently issued a report which ranked Tunisia fifth worldwide in the issue of money laundering, international fraud and fiscal evasion.
The political crisis witnessed today by the country and the absence of an agreement between the political actors on a clear roadmap to end the transitional phase all play a pivotal role in the slow and weak investment process.
Businessmen want political stability followed by security and social stability in order to take investment steps and to have a vision regarding the initiation of projects that require huge amounts of money and guarantees. For them, these are the most important determinants of where to invest and when. Moreover, it is very important to reform the investment law, activate it, and remove all barriers and complexities on the level of administrative and legal procedures, which do not take into consideration the realities of today’s investments in Tunisia.
