Mahmoud Ben Romdhane – The dark years 2011-2020: Economic losses of 273 billion dinars

The bill is heavy. Economist Mahmoud Ben Romdhane estimates that each Tunisian household will lose nearly 107,000 dinars between 2011 and 2020, a decade of massive economic destruction. Er, that is, based on 2023 prices, the per capita loss is 28,400 dinars. The country’s losses were equivalent to 2.1 times its GDP (2020), amounting to 273.4 billion dinars (in 2020 prices). If democracy has no price, then the division of the country by Islamist movements and their allies after January 14, 2011 has. Very expensive to pay. Absorption time is very long. The rebound doesn’t look easy.

On December 17, the day when the spark that changed Tunisia’s contemporary history was ignited, it is crucial to review the economic situation in the first few years of transformation. In a book called “The Tunisian Revolution.” In a long-term historical work, Tunisia from 1574 to 2023, Beit al-Hikma Mahmoud Ben Romdhane University Professor and Rector stressed that the increase in outstanding foreign debt and the decrease in foreign exchange reserves further aggravated the loss. The outstanding debt has thus increased from US$22.7 billion in 2010 to US$41 billion in 2020, an increase of US$18.3 billion, equivalent to 49.2 billion dinars in foreign exchange reserves in 2020, and a 65% decrease over the same period. million dollars, or 174 billion Tunisian dinars, he noted.

The estimate is based on the “mechanical cost measure” used by Linda Bilmes and Joseph Stiglitz (2006) in assessing the costs of the war in Iraq, taking into account the decline in GDP, Increase in foreign debt and decrease in foreign exchange reserves. Ben Romdhane’s analysis assesses the costs of terrorism in affected sectors (impact on tourism and increased security defences, energy, phosphates and derivatives). He added the costs of political instability. The impact of the COVID-19 epidemic was not considered.

Summary of economic losses and their sources 2011-2020 (in billions of dinars at 2020 prices)

Professor Ben Romdan, former Minister of Transport in Habib Essid’s government and then Minister of Social Affairs (2015-2016), highlighted the “serious disruption of the macroeconomic balance”. He highlighted a “spending surge” in the state budget, including government payrolls breaching unprecedented thresholds. Faced with multiple social demands (consolidation of subcontracted personnel, large-scale recruitment and salary increases), successive governments increased the total salary from 6.7 billion dinars in 2010 to 19.2 billion dinars in 2020. Its share of GDP will increase from 10.3% to 16.0% in 2020…

According to the author’s calculations based on Cnrps data, government workers (including public authorities) will increase from 488,067 in 2010 to 653,022 in 2020. “The first three years (2011, 2012 and 2013) were very strong recruiting years: 148,407 new civil servants were added, accounting for 30.4% of the total workforce,” he wrote, including 51,000 employed by subcontractors. agent.

“The next two years,” continues Professor Ben Romdan, “Renaissance took power. 111,400 people were recruited in the public sector (94,000 in the administration, 3,400 in municipalities and 13,100 in public companies, starting with activists .

Under the governments of Mehdi Jomaa (2014) and Habib Essid (2015-2016), average annual new recruitments “fell” to 43,300 per year , if we do not count the power of order and the power of government, there are only 25,700 people. Military recruitment has become necessary to deal with terrorism.

Changes in recruitment numbers in Tunisia from 2010 to 2019 and changes in the number of civil servants (administration + local authorities)Source: Author’s calculation based on CNRPS data

Speaking about the situation of social funds (Cnrps, Cnss and Cnam), economist and former Minister of Social Affairs Mahmoud Ben Romdhane dismissed the negative impact of the lack of the slightest reform in the past few years express regret. “These funds depleted all their reserves and then accumulated considerable losses,” he stressed. The cumulative losses in the ten years from 2011 to 2020 amounted to 6.027 billion dinars. “Of the three funds, Cnam was the only one to generate a surplus, with a surplus of 3.163 billion dinars, which brought the losses of the other two funds to 9.19 billion dinars,” he provided on the subject. Series of helpful explanations.

Evolution of the financial performance of the Social Security Fund (in millions of current dinars)

It is irrefutable that Mahmoud bin Romdan attributes much of the damage suffered by Ennahda and its galaxy to its management of political, economic and social problems and its attempts at hegemony.

Much of the book deals with the political history of Tunisia since 1574, the common denominator of which is the concept of the state in its various mutations. The acquisition of independence and the founding of the republic were subject to intense scrutiny. The turning point was the massive demonstration (60,000 people) in Sfax on 12 January 2010, a “moderate “A “clean” revolution will eventually force Ben Ali to step down. A firm determination to overthrow a corrupt system and a burning desire for freedom form the basis of democratic expectations.

Hindsight, however limited, is now a matter of taking stock of the situation, tracing the trajectory, seeking understanding and exploring future prospects. Professor Ben Romdan’s paper is part of this difficult exercise.

(to be continued…)