By Tristan Dreisbach | Apr 24 2013CPR ,Development ,imf ,ITES ,loan ,
A memo released last week by a think tank tied to the president criticized the loan agreement between Tunisia and the International Monetary Fund (IMF) and called into question the transparency of the Tunisian government.
The memo was released by the Tunisian Institute for Strategic Studies (ITES), a publicly-funded research institute affiliated with the office of the Tunisian president. The head of ITES is a member of President Moncef Marzouki’s CPR party.
Information provided to the IMF by the government painted a much grimmer picture of the Tunisian economy than had been presented publicly, illustrating a “catastrophic” economic situation, the memo asserts.
ITES criticized this as representing a broader lack of government transparency regarding financial and budgetary matters.
Mohammed Mabrouk of the ITES economic department, which produced the memo, questioned why the data provided to the IMF was much more negative than information used to craft the budget just a few months before. There was clearly a problem in the way the budget was drafted, he asserted, and the budget formation process was not specific enough or accurate enough.
The ITES memo also criticizes the government for allegedly spending money beyond that included in the budget.
The document calls for policy changes to enhance budgetary transparency, including a monthly detailed government report on the budget that could be discussed by the National Constituent Assembly (NCA).
The memo criticizes policy changes it says are imposed on the government by the IMF. These include decreased taxes for corporations, changes to the investment code, and the privatization of some public banks.
These reforms are not among the prerogatives of the government, said Mabrouk, asserting that decisions such as amending the investment code should be taken by the NCA, not by the executive branch.
Mabrouk lamented the fact that Tunisia was in a situation forcing it to look for external assistance.
The mistake we made is that we allowed ourselves to get to this situation, he said. Our income is very low, we had more expenses, and found ourselves drawn into debt.
We imported a lot of products that we didn't really need to, he added, saying Tunisia should have kept the deficit between income and expenditure at the same level as last year.
Mabrouk also asserted to Tunisia Live that the terms of the deal had not been finalized, contradicting reports this week that the details had been agreed to, with only formal signatures required to complete the stand-by loan accord.
The deal is reportedly expected to be signed at the next IMF Board of Governors meeting in May. The deal would provide access to a $1.75 billion stand-by fund that could be accessed by the government in an emergency situation. The arrangement will be offered at a 1.08 percent interest rate, according to a source at the Central Bank. Tunisia would have five years to pay back the funds, including a three-year grace period.
The government has insisted that it does not anticipate drawing on these funds.
Farah Samti contributed reporting
Update (April 24): The original version of this article stated that ITES is affiliated with the CPR party. It was corrected to reflect the fact that its official affiliation with the office of the presidency.