In Tunisia, social anger is spreading following an increase in fuel prices

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Tunis, Tunisia, July 01, 2018: City street.; Shutterstock ID 1159404115; Purchase Order: Medirection

Throughout the past weeks, Tunisia has witnessed protest movements conducted by taxi and transportation vehicles drivers against the increase in fuel prices. In its effort to reduce its budget deficit and meet the reforms requested by international financial institutions (IFIs), since 2017 the government has implemented a mechanism of adjustment, generating a rise in fuel prices on a periodic basis. These protests followed a wave of strikes and sit-ins organized by the UGTT affiliated unions, protesting the deterioration of living conditions caused by the depreciation of the Tunisian dinar and the increase of inflation due to austerity measures the government has been implementing within the framework of the IMF agreement signed in 2016.

The protest movements of the taxi and transportation vehicles drivers reflect the exacerbation of social tensions and the spread of anger beyond the public sector workers. More significantly, these protest movements show that inflation is not only an economic problem; it has become a political one.

In the wake of Tunisia’s revolution, the post-2011 government increased food and energy subsidies, namely for electricity and motor vehicle fuels, to alleviate popular anger. Subsidies were raised from 2.5 percent of GDP in 2011 to 7 percent by 2013. However, starting from 2013, the government reversed direction, marginally reducing these subsidies with the aim of gradually eliminating them. The government increased electricity fees by 10 percent in January 2014, then again by a further 10 percent in May 2014. And from 2017, the cost of energy has been increasing steadily.

Between 2011 and 2015, the new political elites never felt able to assume the political cost of reforming subsidy regimes. In 2016, the IMF agreement for a$2.8 billion financing package tied to economic reforms over four years came with pressure to restructure the public sector and especially to cut public spending. The deal with the IMF has put pressure on the government to implement austerity measures, such as placing a freeze on hiring in the public sector, introducing cuts in fuel subsidies, raising the cost of electricity and gas, devaluating national currency, which led to higher inflation, and putting increasing pressure on privatization of state-owned enterprises. Additionally, an increase in the value-added tax rate has been adopted, which has raised the prices of food, and mandatory social security contributions have been implemented, which has reduced take-home pay. Although Tunisia has managed to keep inflation rates relatively under control, reaching only 6.4 percent in 2017, which is a low rate by regional standards, inflation hiked several times in 2018 reaching almost 8%.

This situation exacerbated the tensions among the public sector workers and intensified the activism of different sectors and federations affiliated to the UGTT through demonstrations, sit-ins, occupations of state buildings, and public sector strikes undertaken to defend their privileges by putting pressure on the direction of the labor union to oppose the austerity measures. Over the previous weeks, new social categories like the taxi and transportation vehicles drives, have joined the movement protesting inflation and the deterioration of living conditions.  Indeed, subsidy cuts have led to price increases for consumers and professionals. These increases added to the hike in the prices of imported goods because of the depreciation of Tunisian dinar and have led to the spread of social anger beyond the state-dependent middle classes.

Since 2017, Tunisia’s governments have faced more and more public protests. Indeed, in 2017, there were more than 11,000 instances of social protests, including demonstrations, sit-ins, occupations of land or state buildings, and public sector strikes. This represents a significant increase from the total instances estimated in 2015 (5500) and 2016 (8000). Price increases stem, partially at least, from the austerity measures, but solutions require building popular trust and a sound social dialogue that crafts compromises between unions, representatives of social groups and ruling parties in terms of burden sharing. This should undoubtedly be on the top of the agenda of the post-2019 general elections winners.