Tunisia’s debt crisis, according to Minister of Finance Salim Chaker, is not a hopeless case. In the following interview, Chaker claims that government plans for debt repayment will keep the country’s budge afloat, despite three terrorist attacks this year that shattered the country’s tourism industry.
Minister Chaker, Tunisia will have trouble repaying its debts in the coming years. Are you intending to rearrange your debts?
Tunisia has been committed to its obligations to international financial institutions since independence in 1956.
Tunisia’s debt crisis, according to Minister of Finance Salim Chaker, is not a hopeless case. In the following interview, Chaker claims that government plans for debt repayment will keep the country’s budge afloat, despite three terrorist attacks this year that shattered the country’s tourism industry.
Minister Chaker, Tunisia will have trouble repaying its debts in the coming years. Are you intending to rearrange your debts?
Tunisia has been committed to its obligations to international financial institutions since independence in 1956.
Our debt will decrease from the beginning of 2016 and during the years following, Tunisia will be able to repay its debts.
Debt servicing will rise to TND 5.8 billion (USD 2.9 billion) to reach TND 5.13 billion (USD 2.56), and will probably be under TND 4 billion (USD 2 billion) by 2021.
Why is Tunisia in so much debt? Is it due to the decrease of revenues in foreign currency?
International experts believe that the Tunisian debt is still within reasonable levels, and the government is aiming to decrease internal debt to around 34 percent, and external one to around 66 percent and ultimately down to 50 percent.
This issue was presented to the parliament during a public budget planning meeting a few days ago. The management of this file will be attributed to a new agency rather than the current public department in order to establish more strict control over the country’s rising debt.
Have the successive terrorist acts impacted the efforts to restore the shine of Tunisian economy?
Terrorist operations have undoubtedly adversely affected the growth of Tunisia’s economy, especially after the presidential security bus blast in the capital. The economy is also still being affected by Bardo Museum terrorist attack on March 18, and Hotel Riu Imperial
Marhaba in the tourist city of Sousse on June 26 this year.
Tourism was primarily affected by these attacks resulting in a 26 percent decrease in the number of tourists by November 2015.
All countries, not only Tunisia, are subject to terrorism. This was particularly evident in the Paris terrorist attack of November 13, 2015.
However, the Tunisian government is determined more than ever to combat terrorism. New decisions have been taken in that concern through allocating additional funds worth TND 500 million ( USD 250 billion) to be directed to the Ministries of Defense, Interior, Women and Youth, and Religious affairs.
The Tunisian government decided to close the border with Libya, where situations are getting worse after the infiltration of Daesh (IS). Will this decision resolve the security situation in Tunisia?
The Libyan crisis has had direct impact upon the Tunisian economy. The situation has become more complicated with the growing terrorist threats and infiltration of ISIL. A temporarily solution of 15 days borders closure taken as a result of the last terrorist attack, will definitely not solve the problem. However, the government is closely watching the situation on the ground, and simultaneously working to find a way for the benefit of both countries to reduce potential threats and to take people’s conditions into consideration.
Do you consider the defense and interior budget shares in the new budget as a radical solution?
Increasing the defense and security budgets, for sure, is one of the most important solutions in Tunisia’s combat against terrorism. It is a measure providing both ministries with needed human resources, sophisticated equipment and technology, enabling them to combat and eradicate terrorism.
However, combating terrorism requires a parallel treatment by promoting a moderate culture and proposing new efficient mechanisms for employment.
An additional TND 100 million (US $50 million) dinars will be allocated to the budgets of religious affairs, youth and sports, and culture ministries for new programs and working methods protecting Tunisian youngsters from radicalization.
What are the consequences of dissolving the committee in charge of regaining the funds smuggled outside the country by the ousted president and his family?
Dissolving that committee, which was affiliated to the Central Bank of Tunisia, does not mean that the Tunisian government has abandoned the recovery of looted and smuggled funds by President Ben Ali and his family. The Ministry of State Property is now in charge of this very complex legal file.
And what is the status of recovered property now?
The government faces difficulties in dealing with these confiscated properties. Since the revolution, the properties have mostly been registered. We confiscated 593 properties, of which a few were sold and 300 were registered as state properties, yet, the others were not. Knowing the difficulties, we are striving to find solutions providing new financial budget resources.
The Ministry of Finance is currently determined to accelerate the sale of 196 properties in addition to 25 luxury cars. Due to their high prices, one of which is US $500,000, the government will need sell these items based on the experience of an international expert. In 2016, sales revenues are expected to generate significant revenues for state treasury.
What about selling Ben Ali Palace at Sidi Bou Said suburb in the capital?
It has been confiscated but it is not for sale. The Ministry of Culture and Heritage Preservation asks to convert it into a national memorial museum. The decision is still under discussion.
The government intends to sell some facilities as Islamic Bonds (Sukuk). Can you clarify this controversial issue?
Working groups, with political and technical experts, are being prepared to find appropriate solutions for the new budget funds using Islamic Sukuk, but no decision will be taken without consensus.
Politically, the Tunisian parliament approved this mechanism, which is used in Great Britain as well. Technically, we will try to access and satisfy the norms of important markets that have enough liquidity.
Currently, mortgaging or selling a famous monument like Rades Stadium is an idea, reportedly, refused by the public. In this context, we interact with public opinion, the parliament, and economic experts.
I confirm that, so far, there is no final decision taken to sell the stadium. Currently, anything is possible and probable. I can assure the Tunisian people that this file will never jeopardize their interests.
