Tunisia risks political instability with face-off between PM and leader of Nidaa Tounes

A lack of confidence in the government’s stability translates into higher interest rates for debt holders and more difficulties in selling bonds.
Sunday 03/06/2018
Tunisian Prime Minister Youssef Chahed addresses parliament amid calls to reshuffle government, last March.  (AFP)
Crisis mode. Tunisian Prime Minister Youssef Chahed addresses parliament amid calls to reshuffle government, last March. (AFP)

TUNIS - Tunisian Prime Minister Youssef Chahed was defiant in the face of powerful rivals clamouring for his ouster amid a growing political crisis that is forcing Tunisia to deal with several thorny issues at the same time.

Hafedh Caid Essebsi, the influential son of the country’s president, leads the secularist Nidaa Tounes party that backed Chahed as prime minister two years ago. Now he is at the forefront of a campaign to unseat Chahed.

The Tunisian General Labour Union (UGTT), which was the leading force in the removal of the Islamist bloc from government in 2013, is Caid Essebsi’s de facto ally in the dispute with Chahed, the youngest person to be prime minister since Tunisia’s independence from France in 1956.

Chahed is a leading figure in Nidaa Tounes, founded by President Beji Caid Essebsi in 2012 as a counterweight to the resurgent Islamist Ennahda party.

The power struggle between Hafedh Caid Essebsi and Chahed suggests that Nidaa Tounes is a party in tatters with parliamentarian and presidential elections coming in 2019. A unified and strengthened Nidaa Tounes would likely be the backbone of the anti-Islamist camp if Ennahda is to be defeated in the vote.

“Hafedh Caid Essebsi has destroyed Nidaa Tounes,” said Chahed in a televised speech May 29. “Hafedh Caid Essebsi and his entourage have ruined everything in Nidaa.”

“I’m talking about Nidaa because it is the party that is able to create the balance on the political landscape but it is not anymore what it once was,” he said.

Chahed is the first senior government official to assail Hafedh Caid Essebsi’s party leadership. The president’s son was criticised by former Nidaa Tounes officials after they left to form their own parties and alliances, weakening the main anti-Islamist political force in the country.

Nidaa Tounes won the elections for both the presidency and the parliament in 2014. It unified leftists and former members of the disbanded ruling Democratic Constitutional Rally party in opposing Ennahda.

The internal conflict raised questions among party members and other anti-Islamists about Nidaa Tounes’ sustainability and whether it can repair its divisions before next year’s elections.

“The political crisis (in the country) has begun inside Nidaa Tounes. Nidaa Tounes does not sound like the same party that I joined in 2013,” said Chahed.

“Hafedh Caid Essebsi and his followers have destroyed the party and pushed out all competent members. All the structures of the party are blocked, which raises questions about the decision-making within the party.

“The decisions from the party do not reflect the genuine willingness of the party’s grass roots and its parliamentarians. It is time to correct the trajectory of the party to win back the trust of its sympathisers,” he said.

Analysts and former leading figures of Nidaa Tounes said Chahed was likely to leave the party to avoid a bruising political battle within his own party. They said he lacked an organised political force to fight the challenges presented by Hafedh Caid Essebsi and the UGTT, which could derail his reform efforts through stoppages and street protests.

Chahed, however, vowed to stay the course and spoke of the need for party reform.

Chahed’s government, the seventh in eight years, has until recently been the most stable coalition since 2011, receiving the support of the main parties in parliament and leading civic organisations, including the UGTT and the Tunisian Confederation of Industry, Trade and Handicrafts.

Government backers sought to rewrite state priorities during lengthy dialogues under the watch of President Beji Caid Essebsi. They wrapped up discussions May 24, agreeing on everything but whether Chahed and his government would implement the 63-point programme.

The UGTT walked out of the talks and urged Chahed’s removal. Hafedh Caid Essebsi listed the government’s “failures” as reason for Chahed to step down.

“For us, the government is now only a caretaker cabinet. It has lost its meaning and legitimacy as government in the political sense, even when it does not lose its legitimacy in the constitutional and parliamentarian sense,” said senior Nidaa Tounes official Khaled Chouket.

Chahed, in an apparent response to the criticism, said: I “will not shirk my responsibilities.”

He says Tunisia “is in a crisis” and will proceed with reforms, suggesting  another government reshuffle.

“The government has succeeded in some fields, namely the security situation and the improvement of the growth rate, but the performance is not as positive as it should be,” Chahed said, adding that the government’s main problems are the budget deficit, inflation and cost of living.

Analysts said with Ennahda backing Chahed as prime minister out of concern for “government stability” and the “interests of the country,” no party has the needed number of seats in parliament to remove Chahed through a vote of no confidence.

Much-needed social stability is out of reach due to trade union leaders’ opposition to Chahed when it is critical for Tunisia to convey an image of stability for foreign investors and capital markets.

Tunisia’s Central Bank on May 27 said the country needed to immediately tap into capital markets abroad to sell $1.16 billion in bonds to cover the country’s budget deficit and replenish dwindling foreign currency reserves.

A lack of confidence in the government’s stability translates into higher interest rates for debt holders and more difficulties in selling bonds.

As the political crisis within Nidaa Tounes dominated the news, a team from the International Monetary Fund (IMF) visited Tunis to assess the government’s implementation of reforms linked to a $2.9 billion loan. Previous political allies are not as publicly supportive of those reforms.

The IMF wants Tunisia to cut subsidies and trim its bloated public-sector wage bill to address the budget deficit and reduce losses by state-owned companies.

The government set a target of 5% growth by 2020 versus an expected rate of 2.5% this year. It intends to halve the budget deficit to 3% of GDP from in 2017. However, reforms needed to hit key growth targets face challenges from the social front, with the UGTT demanding wage raises and other concessions.

“The escalation from (the) UGTT will begin with a spate of strikes in an attrition war in parallel to negotiations over wage raises that their outcomes are known in advance because of the situation of the government budget,” predicted Hafedh Ghribi, editor-in-chief of the news website Assabah News.