2023-11-05 09:55:22
“The absence of vigorous growth, which makes it possible to respond to the country’s financial difficulties, constitutes, in my opinion, the original sin. The budgetary and current account deficits as well as the macroeconomic and public finance imbalances which are the visible part of the iceberg have their origins in this inability to stimulate growth,” underlined economist Fatma Marrakchi.
Speaking during an online debate organized by the think tank Global Institute 4 transitions (GI4T), Pr Fatma Marrakchi delivered a critical reading of the PLF 2024. The round table which was devoted to the discussion of the PLF, which is currently the subject of parliamentary discussions, made it possible to take a cross-referenced look at the said project.
For Marrakchi, the absence of financing is the main characteristic of this law which is in the same vein as the LF 2023. Financial resources, particularly external, having been lacking, the PLF 2024 does not resolve the issue. question of financing. Indeed, in the absence of an agreement with the IMF, the impossibility of resorting to external financing today poses a real problem, especially since Tunisia is an energy and wheat importing country. Besides, Marrakchi did not hesitate, in this regard, to warn against the conversion of part of external financing into internal financing.
“In 2023, we were unable to mobilize the resources that we provided for in the finance law and we switched part of the external financing to domestic financing. And it can be serious […] Because in this case, the increase in the money supply will be inflationary because these are not the credits which will be used to finance investment and therefore, in turn, boost the economy. The risk of inflationary slippage is significant,” explained the economist. She added that excessive reliance on domestic financing dries up liquidity to the detriment of private investment, one of the main engines of growth. In addition, private investment is significantly affected by cuts made in the public investment budget, which is its main determinant.
An incompressible budget and a necessary reform
According to Marrakchi, this situation is inevitable to the extent that the state budget is, in fact, incompressible. Because each dinar provided for in the state budget is spent as follows: 550 millimes for salaries which constitute an incompressible block and 450 millimes which go for interventions, namely social allowances, subsidies and interventions for businesses public. The economist indicated that in the current state of affairs, a budgetary reform, consisting in a reallocation of resources, is necessary to be able to free up fiscal space. Thus, the review of the subsidy system and the overhaul of the governance of public companies are of proven urgency.
“The publication and application of Law (amended) 89-9 relating to public enterprises is a reform which does not require any financing although it makes it possible to improve the efficiency and governance of public enterprises. Why this inertia? ”, commented Marrakchi.
She also criticized the absence of impactful measures for the benefit of SMEs which are the real creators of wealth in Tunisia. “The absence of vigorous growth which makes it possible to respond to the country’s financial difficulties constitutes, in my opinion, the original sin. The budgetary and current account deficits, as well as the macroeconomic imbalances which are the visible part of the iceberg, have their origins in this inability to stimulate growth,” she stressed.
This problem is explained, according to the speaker, by the maintenance of barriers to entry which prohibit any virtuous competition capable of challenging the system, creating jobs and balancing the market.
Cartels, monopolies, authorizations and specifications are all forms of barriers that stand in the way of young innovative entrepreneurs. “It is an economy closed from the inside even if it is open to the outside,” she asserted.
Furthermore, Marrakchi focused on the analysis of the hypotheses underlying the PLF 2024. She believes that the latter do not take into account the international economic environment: in fact, with a barrel price set at 81 dollars, this is, according to the professor, an underestimate, especially since the price should experience a sharp increase over the coming period, given recent geopolitical developments. Regarding growth estimates, the speaker argues that a rate of 2.1% is not ambitious.
Possible measures to increase tax revenue
Referring to the shortfall caused by the development of the informal economy, Mohamed Salah Ayari, member of the national tax council, called for measures to be taken to reintegrate this sector into the economic circuit. This essentially involves changing bank notes, while regularizing the situation of operators in the informal economy, after having paid an amount equivalent to 10% of the sums they will have to pay to the banks. . Furthermore, a tax amnesty can help, according to the speaker, to replenish state coffers and increase tax revenue in a difficult economic context where SMEs are struggling to generate growth. According to Ayari, the need to develop a new investment code no longer needs to be demonstrated.
Economic growth is not the main objective of the PLF 2024
For his part, Anis Wahabi, accountant, indicated that the revitalization of the economy does not appear among the objectives of the PLF 2024, in accordance with what was announced both by the law itself or by the document of the main orientations of the budget published by the Ministry of the Economy.
Restoring the balance of public finances, controlling subsidy expenditure and strengthening the social role of the State, these are the main objectives of the PLF 2024 which, however, suggests difficulties in mobilizing financing. For the accountant, it is necessary to get rid of the accounting mindset in order to be able to design finance laws that can stimulate investments.
Commenting on the introduction of new taxes on dairy products as well as the increase in the tourist tax applied in the tourism sector, Wahabi estimated that these measures do not address the problem of subsidies at the root and only harm key economic sectors.
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