Editor’s Note: May 03, 2019

Structural adjustment is making a comeback

Fuel distribution workers in Tunisia started a three-day strike on Thursday after wage talks with the government collapsed. It’s the latest in a series of strikes and protests over worsening economic conditions

The country has struggled since the ousting of former ruler Zine El Abidine Ben Ali in 2011, which kicked off the Arab Spring.

Growth has averaged just 1.7% since 2015, with investment slumping to $900m in 2017. Youth unemployment is almost 37%,

This is only part of the story.

Public anger is also being fueled by IMF-backed austerity, part of a $2.8bn loan agreed in 2016. This has brought with it a familiar checklist of conditions, including public sector cuts and price hikes

The result is a government struggling to balance the demands of its citizens and donors.

In February it raised public sector wages against the wishes of the IMF. This led to a “very difficult” loan review in April, with the lender agreeing a $247m disbursement contingent on hitting a 3.9% budget deficit target.

Put differently, expect more austerity.

Tunisia is walking a tightrope reminiscent of the dreaded structural adjustment programs of the 80s and 90s. With cash-strapped African governments flocking back to the IMF amid fears of a new debt crisis, it’s a preview of things to come.

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