In a nutshell
Tunisia has been facing major disequilibria in its public finances. To stabilize its debt and foster a growth approach, Tunisian policymakers should:
- Refrain from adopting an approach that relies entirely on austerity, as this is likely to generate social resistance that undermines adjustment and further harms the growth process.
- Break away from the fundamentalist approach of austerity that penalizes potential growth and collective well-being.
- Develop a national program for adjustment and recovery that places greater importance on restarting the growth process.
- Elicit citizen support for reforms and build a coalition for change to guarantee the implementation of reforms without running the risk of a rise in social and political instability.
- Include climate change challenges in this national program by greening monetary and fiscal policy and strengthening research and development efforts to boost the circular economy.
![Debt and Stabilization in Tunisia: Building Resilience and Avoiding the Austerity Trap](https://erf.org.eg/app/uploads/2019/05/1600175654_491_85550_nlleilabaghdadi-150x150.png)
Research Fellows
Leila Baghdadi
Professor of Economics, ESSECT, University of Tunis
![Debt and Stabilization in Tunisia: Building Resilience and Avoiding the Austerity Trap](https://erf.org.eg/app/uploads/2023/09/1693752423_408_85488_nl_moezlabidi-150x150.png)
Authors
Moez Labidi
Senior Advisor to the Arab Planning Institute...