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Tunis/Tunisia — Tunisia, which is facing a budgetary pressure and lacks additional resources for ambitious resilience programs needs a better national coordination and developing regional programmes to cope with the new shock of supply of raw materials, including grain and energy, caused by the Russian-Ukrainian conflict.
The country could, as far as gas is concerned, benefit from the increase in Algerian exports through the national territory and the increase in production of liquefied gas in the next few years, said a note from the Arab Institute of Business Managers (IACE), released Thursday, April 13, 2022.
“Tunisia should focus on preparing for the new grain season by encouraging farmers by doubling the purchase prices for the coming season and the establishment of a line of credit of 100 MD for grain crops,” also recommends the IACE, in this note which refers to four trends of the post-conflict: The warming of stagflation, the New World Order, a new globalisation and inclusive resilience.
“These efforts will need to be coupled with technical assistance primarily for small farmers and the provision of adequate seeds.”
The note, entitled “post-war, new trends”, argued that in the absence of direct government support to companies to secure their supplies, Tunisian companies should explore new modes of organisation, grouping in the form of central purchasing, etc.. to consolidate their positions and mitigate the impact of the crisis.
“At the same time, it is important to adopt measures to further improve the business climate and reduce distortions and barriers, particularly reducing costs related to logistics (port …), simplifying administrative procedures, accelerating customs procedures, improving access to finance.
For Tunisia, resilience cannot be managed or ensured solely by the interventions of the state budget. It will certainly require a readjustment of production chains, a reduction in foreign dependence and a search for alternatives either in terms of consumption or production capacity or processes.
The IACE recalls that in terms of food products, Russia and Ukraine are the first and fifth largest wheat exporters in the world, respectively. The two countries are also among the five largest exporters of grain in the world. According to an FAO note, prices would increase by 8.7 percent in a moderate scenario and by 21.5 percent in a pessimistic scenario.
The price surge could impact several countries.
Indeed, more than 30 economies depend on exports from Russia and Ukraine, which account for nearly 30% of their wheat import needs.
A more pragmatic approach is recommended
The Tunisian economy is highly dependent on its external environment, either for supply or for exports, due to a poorly integrated ecosystem.
Faced with this new world order, Tunisia should, according to the note of the IACE, rethink its relationship with its first trading partner which is the European Union. It should also rethink relations with its close neighborhood, particularly with Algeria and Libya, according to a more pragmatic approach both economically and politically.
The challenge for Tunisia is the reengineering of trade agreements in force with Europe, Algeria, China, the United States, and Turkey with the aim of strengthening regional integration.
The Tunisian Central Bank (BCT) could consider including the ruble and the Yuan in its basket of currencies, allowing Tunisian operators mainly in the tourism sector to accept payments in these two currencies.
“These funds will allow the payment of Tunisia’s purchases of raw materials from these two countries and also facilitate the attraction of tourists from these two countries whose destinations abroad are increasingly limited.
An inclusive resilience
In Tunisia, the activation of multi-stakeholder social dialogue and the establishment of the Higher Council for Social Development are assets for a better inclusive resilience. Thus, thanks to the dynamism of its civil society, Tunisia could claim a better future.
Still according to the note of the IACE, the objectives in terms of sustainable development, environment, ecology will be controversial topics. “Although the move towards renewable energies enshrines them, the primacy of increasing agricultural production and ensuring food security may be at the expense of them.
The governance of water resources and the use of arable land will certainly be reviewed to ensure better optimisation and maximum use.
“Tunisia is among the first countries concerned by the optimisation of these resources and the use of these agricultural lands unused for administrative and legal considerations,” said the authors of the document.
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