The International Monetary Fund IMF has reached a staff-level agreement with Tunisia for a new 48-month Extended Fund Facility (EFF) worth about $1.9 billion, which will support the authorities’ economic reform programme.
A final agreement is subject to the approval of the IMF’s executive board, which is scheduled to discuss Tunisia’s request in December, the Washington-based lender said on Saturday.
“The worsening global environment and high international commodity prices are weighing heavily on the Tunisian economy, adding to underlying structural weaknesses amid challenging socio-economic conditions,” said Chris Geiregat and Brett Rayner, who led an IMF team that met with Tunisian authorities in Washington from Monday to Saturday.
“Growth will likely decelerate in the near term, while higher international commodity prices will put pressure on inflation as well as on external and fiscal balances.”
Tunisia’s economy was severely affected by the war in Ukraine, which widened its current account deficit, as well as the coronavirus-induced slowdown, high debt and deteriorating finances, all of which required that it introduce several reforms to secure funding from the IMF.
The North African country had sought $4bn in funding from the IMF, which could help it to steer the nation out of its worst economic and financial crisis that has been exacerbated by the rise in energy and commodity prices globally.
The IMF expects Tunisia’s economy to grow by 2.2 per cent this year and inflation to rise to 7.7 per cent. The World Bank estimates gross domestic product growth of 3 per cent this year.
Tunisia’s government debt rose to 79.2 per cent of the GDP in 2021, according to government estimates, lower than the 85.6 per cent initially projected in the 2021 budget.
“The new EFF arrangement will support the authorities’ economic reform programme to restore Tunisia’s external and fiscal stability, enhance social protection, and promote higher, greener and inclusive growth and private sector-led job creation,” Mr Geiregat and Mr Rayner said.
The Tunisian government’s reform programme will improve tax equity by taking steps to bring the informal sector into the tax net and broadening the tax base to ensure equitable contributions from all professions, the fund said.
It will also aim to contain public expenditures and create fiscal space for social support. The authorities have already taken steps to contain the civil service wage bill and started to gradually phase out wasteful price subsidies through regular price adjustments that link domestic prices to international prices, while providing adequate targeted protection to vulnerable segments, including through social transfers, according to the IMF.
In June, the Tunisian government said it would begin to cut food and energy subsidies in 2023 and reduce the public wage bill by 5 per cent over the next three years.
The government will also expand the coverage of social safety nets by increasing cash transfers to compensate vulnerable households for the impact of higher prices.
Other reforms include reforming state-owned enterprises, stepping up structural reforms to create a level-playing field for investors by offering investment incentives and strengthening governance and transparency in the public sector.
The reform programme will also aim to protect the purchasing power of Tunisians in the face of high and accelerating inflation, the IMF said.
“To reinforce macroeconomic stability, the Central Bank of Tunisia has started to tighten monetary policy,” it said.
The government will also promote investments in renewable energy as well as land and (waste) water management, and adopt measures to preserve Tunisia’s coastlines, agriculture, health and tourism as part of the reform programme.
The fund said the international community has an important role to play in facilitating Tunisia’s bailout programme through the rapid release of financing to ensure the success of the government’s policy and reform efforts.
Political turmoil in the country has impeded earlier reform efforts. President Kais Saied dissolved parliament before a referendum on constitutional reforms and took control of the country’s judiciary after firing 57 judges. In July, Mr Saied suspended parliament and dismissed the prime minister.
Political instability and the deteriorating economy led Fitch Ratings to cut Tunisia’s rating in March to “CCC”, from “B-", seven notches below investment grade and on par with El Salvador and Ethiopia.
The rating downgrade denotes a very high level of default risk relative to other issuers or obligations, mainly due to heightened fiscal and external liquidity threats.
Moody’s Investors Service placed Tunisia’s long-term foreign currency and local currency issuer ratings on review for downgrade this month. Prior to this action, Tunisia’s rating was Caa1 with a negative outlook, the New York-based rating agency said.
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Results
2.15pm: Handicap Dh80,000 1,950m
Winner: Hello, Tadhg O’Shea (jockey), Ali Rashid Al Raihi (trainer).
2.45pm: Handicap Dh90,000 1,800m
Winner: Right Flank, Pat Dobbs, Doug Watson.
3.15pm: Handicap Dh115,000 1,000m
Winner: Leading Spirit, Richard Mullen, Satish Seemar.
3.45pm: Jebel Ali Mile Group 3 Dh575,000 1,600m
Winner: Chiefdom, Royston Ffrench, Salem bin Ghadayer.
4.15pm: Handicap Dh105,000 1,400m
Winner: Ode To Autumn, Patrick Cosgrave, Satish Seemar.
4.45pm: Shadwell Farm Conditions Dh125,000 1,200m
Winner: Last Surprise, James Doyle, Simon Crisford.
5.15pm: Handicap Dh85,000 1,200m
Winner: Daltrey, Sandro Paiva, Ali Rashid Al Raihi.
UAE currency: the story behind the money in your pockets
BUNDESLIGA FIXTURES
Friday (All UAE kick-off times)
Borussia Dortmund v Eintracht Frankfurt (11.30pm)
Saturday
Union Berlin v Bayer Leverkusen (6.30pm)
FA Augsburg v SC Freiburg (6.30pm)
RB Leipzig v Werder Bremen (6.30pm)
SC Paderborn v Hertha Berlin (6.30pm)
Hoffenheim v Wolfsburg (6.30pm)
Fortuna Dusseldorf v Borussia Monchengladbach (9.30pm)
Sunday
Cologne v Bayern Munich (6.30pm)
Mainz v FC Schalke (9pm)
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
'Unrivaled: Why America Will Remain the World’s Sole Superpower'
Michael Beckley, Cornell Press
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
UAE currency: the story behind the money in your pockets
Start-up hopes to end Japan's love affair with cash
Across most of Asia, people pay for taxi rides, restaurant meals and merchandise with smartphone-readable barcodes — except in Japan, where cash still rules. Now, as the country’s biggest web companies race to dominate the payments market, one Tokyo-based startup says it has a fighting chance to win with its QR app.
Origami had a head start when it introduced a QR-code payment service in late 2015 and has since signed up fast-food chain KFC, Tokyo’s largest cab company Nihon Kotsu and convenience store operator Lawson. The company raised $66 million in September to expand nationwide and plans to more than double its staff of about 100 employees, says founder Yoshiki Yasui.
Origami is betting that stores, which until now relied on direct mail and email newsletters, will pay for the ability to reach customers on their smartphones. For example, a hair salon using Origami’s payment app would be able to send a message to past customers with a coupon for their next haircut.
Quick Response codes, the dotted squares that can be read by smartphone cameras, were invented in the 1990s by a unit of Toyota Motor to track automotive parts. But when the Japanese pioneered digital payments almost two decades ago with contactless cards for train fares, they chose the so-called near-field communications technology. The high cost of rolling out NFC payments, convenient ATMs and a culture where lost wallets are often returned have all been cited as reasons why cash remains king in the archipelago. In China, however, QR codes dominate.
Cashless payments, which includes credit cards, accounted for just 20 per cent of total consumer spending in Japan during 2016, compared with 60 per cent in China and 89 per cent in South Korea, according to a report by the Bank of Japan.
More from Rashmee Roshan Lall
Wallabies
Updated team: 15-Israel Folau, 14-Dane Haylett-Petty, 13-Reece Hodge, 12-Matt Toomua, 11-Marika Koroibete, 10-Kurtley Beale, 9-Will Genia, 8-Pete Samu, 7-Michael Hooper (captain), 6-Lukhan Tui, 5-Adam Coleman, 4-Rory Arnold, 3-Allan Alaalatoa, 2-Tatafu Polota-Nau, 1-Scott Sio.
Replacements: 16-Folau Faingaa, 17-Tom Robertson, 18-Taniela Tupou, 19-Izack Rodda, 20-Ned Hanigan, 21-Joe Powell, 22-Bernard Foley, 23-Jack Maddocks.
