29 April 2014

Tunisia: Facing Austerity, Tunisia to Hike Minimum Wage

Tunis — Tunisia's top leaders are vowing to slash their salaries and hike the minimum wage as the country faces tough economic times.

Interim President Moncef Marzouki took the lead on April 18th by voluntarily taking a two-thirds pay cut from his 30,000 dinars salary.

"We are facing a financial and economic crisis. The state must be a model... That is why I have decided to lower the legal salary of the president of the republic to a third" of its current level, Marzouki said in a statement.

"The presidency has started a set of diplomatic actions to find solutions imposed by the reality, even on a temporary basis," he added.

Ahmed Abdel Wahed, a 30-year-old waiter, commented, "If the government is calling on people to make sacrifices and to be patient, people on top should be the model. It is a positive step that may encourage people to accept the government's austerity measures."

But economist Moez Ejjoudi considered the steps symbolic "because they will not solve the real problem of the budget deficit, which is estimated at more than 5 billion Tunisian dinars".

"At this time and in this economic situation there is no room for an increase in wages and for recruitment in the civil service because there is no economic growth, which is in the range of 2.5 percent," he added.

While public sector employment may be stagnating, the government agreed last month to negotiate an increase in the minimum wage for the private sector.

Tunisian General Labour Union (UGTT) head Houcine Abbassi said on March 24th at a labour meeting, "The UGTT adheres to the increase in the wages of all state employees and workers in the public sector because the purchasing power of the citizen has deteriorated and successive governments have failed to control prices and save the situation."

"Hence, prices should be controlled and we should protect the purchasing power and control the parallel economy. It is unreasonable to only ask workers to make sacrifices," he added.

But the difficult economic situation facing Tunisia, coupled with the wide 2014 budget gap, is forcing authorities to look for other ways to reduce the deficit.

Mehdi Jomaa's government demanded sacrifices from all social parties and is expected to lift subsidies on fuel prices and gradually reduce subventions for commodities such as bread.

However, experts cautioned this could exacerbate the suffering of Tunisia's poorest citizens.

The Popular Front refused this option categorically and demanded that Jomaa not compromise the subsidy system and suspend working with the 2014 budget.

Nabil Abdellatif, head of the Chartered Certified Accountants Society in Tunisia, told Magharebia, "It is unconceivable that there are today people in the private sector earning less than $400."

"There are now in Tunisia low wages, such as $100 and $200. This is unreasonable and unacceptable after the revolution," he continued. "These wages should be raised to encourage people to work in the private sector and not in the public. Contrary to what is said, it is in the private sector that the economic situation allows for these raises."

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