Tunisians gripe about declining purchasing power

2008-08-21

As Tunisian families prepare for Ramadan food expenses and paying for children's back-to school needs, people are turning to sales and bank loans to get by.

By Jamel Arfaoui for Magharebia in Tunis – 21/08/08

[Getty Images] In the lead-up to both Ramadan and the return to school, Tunisians are concerned about their purchasing power. Grain production faltered this year and food prices are on the rise.

With the arrival of both Ramadan and the return to school, Tunisian families are more concerned than ever about their purchasing power. Public and private wages have stagnated and negotiations over workers' pay increases have stalled, yet prices continue to rise

Despite a higher-than-average grain harvest last year, the outlook for this year will likely reflect poor weather conditions and weak investment in the agricultural sector, National Arable Crop Federation chief Hatem Hamzaoui said. As a result, Tunisia has to import no less than 600,000 tons of soft wheat to feed its population of 10 million people.

The government has upped fuel prices four times this year, making grain imports even more expensive. Bread loaves now weigh less, even as the prices of many food items climb.

"The truth is, we can no longer afford the daily cost of living, such as the cost of food," said Moncef, 40. "Although Tunisia is a coastal state, fish has become a luxury that only the affluent can afford."

In an effort to assuage popular concern, in July Prime Minister Mohamad Ghannouchi called a meeting of unions, including the Tunisian General Labor Union (UGTT) and the Employers' Organisation, to discuss the impact of higher prices. Tunisian authorities decided that one helpful response would be to launch the annual sales season earlier than usual – at the beginning of August, rather than halfway through.

"Sales are likely to ease the burden on families," said Sofiene Rejeb, a journalist who covers the sale season. He predicted that the summer sales would see a large turnout, "especially since the sale season coincides with the month of Ramadan and Lesser Bairam (Eid), the two times of year that normally call for massive consumption and large-scale spending by Tunisians".

"Added to that is the back-to-school season," he said. "Sales have thus become highly important in the lives and habits of Tunisian consumers."

Mrs. Alya, a mother of three, however, told Magharebia that she plans to avoid the temptations of the sales. With Ramadan just around the corner, and her children getting ready to go back to school, she said she felt completely overwhelmed and perplexed.

"I do not think my husband's and my salaries will be able to sustain all those expenses. We have no choice but to ask for a bank loan."

According to the most recent statistics released by the National Statistics Institute, the amount of loans given by commercial banks in Tunisia has nearly doubled within four years, from 3.1 billion dinars in 2003 to 6 billion dinars in 2007. In 2007, the government authority said, more than 18% of the workforce requested bank loans.

On July 12th, UGTT mouthpiece al-Sha'b published in article by Georges Adda, an expert on social development issues, calling on employers and workers to press for better wages, increased domestic production and less unemployment in order to develop the country's economy.

"In the future all the nation would be able to benefit from the fruit and rates of development, which ought to be distributed justly. In brief, the poor should not get poorer while the rich get richer. This is about political will," Adda wrote.

Shopping in a commercial area in the Tunis suburbs, local resident Mokhtar Ben Brahim told Magharebia that citizens' greed and their failure to plan their family budgets well cause a number of Tunisian to accumulate debt.

"I know many people who buy things they do not need in their daily lives and resort to taking loans from banks," he said. "We are maniac consumers."