2024-03-30 02:41:58
The Tunisian parliament prevented the Qatar Fund for Development from opening a branch in Tunisia, which is suffering from financial hardship, “which represents a potential setback for efforts to revive the economy and avoid default,” according to Bloomberg.
Lawmakers allied with President Kais Saied led the stand against the proposal of the fund, which is run by the State of Qatar, to open a branch in Tunisia.
The approval was key to quickly releasing about $150 million in immediate financing and paving the way for additional support from the wealthy Gulf state.
During a heated debate on Tuesday, opponents described the proposed offer as “booby-trapped,” a threat to national sovereignty, and inconsistent with Saied’s declared policy of self-reliance.
Others linked this to Qatar’s alleged support for Islamist politicians, including the Ennahda party, some of whose members have been in prison since Saied assumed greater powers in 2021.
Tunisia, which suffers from slow economic growth and high rates of youth unemployment, is struggling to reconcile its debt obligations with the need for public investment.
After a $1.9 billion rescue agreement with the International Monetary Fund faltered, the possibility of authorities resorting to Arab countries to meet financing needs estimated at approximately 28 billion dinars ($9 billion) this year is increasing.
The rejection is a “setback” but may be part of the regular ebb and flow in Qatari-Tunisian relations since the Arab Spring revolutions of 2011, according to Mark Bohlund, senior credit research analyst at REDD Intelligence.
He added in an interview with the agency that Tunisia’s strong relations with Algeria and Saudi Arabia make them possible alternative sources of financing.
The value of Tunisian dollar bonds has risen since November, but the spread between the yield on these bonds and US Treasury bonds is still close to 1,000 basis points, a level considered by many traders to be a sign of deterioration.
Last updated: March 28, 2024 – 23:37
Suggest a correction
2024-03-30 02:41:58