29 March 2013 6:07 pm | | 1


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IMF Director Christine Lagarde at the 2013 World Economic Forum

Leaked classified documents that detail Tunisia’s request for a loan from the International Monetary Fund (IMF) have raised questions over the lack of inclusiveness by the government in its approach to obtaining the loan. The documents, classifed as highly confidential, were published by Tunisian radio Shems FM on Wednesday.

In a recent interview on RTCI, former governor of the Tunisian Central Bank, Mustapha Kamel Nabli, explained that governments seek recourse from the IMF when they face the impossibility of financing their budgets. In exchange for assistance, the IMF will ask for reforms to be implemented. These reforms would aim to remedy the vulnerability of the Tunisian banking sector and restore the external and budgetary equilibrium.

Tunisia is looking to sign a stand-by arrangement with the IMF for a loan of 2.7 billion dinars ($1.6 billion) repayable over five years with a grace period of three years and three months. This will be contingent on a two-year program of structural reforms to be implemented in August 2013.

One of the released documents is a draft letter to IMF director Christine Lagarde from Tunisian Central Bank Governor Chedly Ayari and Finance Minister Elyes Fakhfakh. Another is a timetable for prior actions before the loan would be granted.

Nabli said that according to the leaked documents, it seems that Tunisia’s economic policy for 2013 has been shaped by the IMF’s recommendations. In order for the stand-by arrangement to succeed, he told RTCI that the structural arrangements have to be part of a national program without any outside pressure or imposed measures. The lack of public debate between Tunisian citizens and their government will have negative effects on the implementation of this process, he said.

IMF spokesman William Murray stated in a March 14 press release that “negotiations for a precautionary Stand-By Arrangement are ongoing at a technical level with the Tunisian authorities.” The IMF’s mission chief to Tunisia, Amine Mati, said yesterday that an IMF team would visit the country between April 8 and 15, reported Reuters.

The confidential documents stirred further questions due to the gap between public figures for the inflation rate, growth rate, and the budget deficit and those contained in the leaked documents. The official growth rate conveyed to the public, for example, has been put at 3.6% while the same indicator in the classified document comes to 3.2%. In addition, a budget deficit of 8% of GDP that the leaked document cites contrasts the official figure, which stands at 5.9%.

The leaked letter also describes the evolution of recent economic and financial indicators. The Tunisian economy began to recover in 2012, it says, despite the international recession and the difficult domestic situation. The inflation rate has increased due to rising wages, food and energy products as well as demand from Libya. A delay in the adoption of a complementary financial law of 2013, combined with constraints on the execution of public spending projects in parts of Tunisia, has left the implementation of public investments falling short by 25% of government’s original aim.

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Comments (1)

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  1. jm swallow says:

    there is no substitute for a government in any country ONLY spending the revenue it gets in – the problems in Greece, Spain surely illustrate that only too graphically.

    why does the government need this loan? – to cover the credit card bill of its deficit.

    what actual steps is it taking to eliminate the deficit and live within its means? few steps, because sticking spending on credit evades the harsh reality of living within means. In the uk the government is in trouble over deluding itself what it can afford, and indeed the USA also.

    Governments should borrow to finance infrastructure projects that in turn earn it direct revenue. So improving a port earns immediate money in landing dues etc.

    Harsh i know but we all have to get a grip, and you would have thought an islamic-leaning government would think very carefully before usury?!

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