May 24, 2018 / 2:38 PM / in a month

Tunisian parties discuss cabinet reshuffle, exit of prime minister

TUNIS (Reuters) - Tunisia’s ruling coalition is holding talks to tackle an economic crisis that could lead to a cabinet reshuffle and the exit of Prime Minister Youssef Chahed, political sources said.

Tunisia is hailed as the Arab Spring’s only democratic success because protests toppled autocrat Zine El Abidine Ben Ali in 2011 without triggering upheaval like in Syria or Libya.

But seven prime ministers have failed to fix an economic crisis as turmoil and militant attacks have deterred investors and tourists, eroding living standards of ordinary people and causing an increase in unemployment.

Annual inflation hit record levels of 7.7 percent in April as the dinar tanked, making food imports more expensive.

Experts from the two ruling parties — the secular Nidaa Tounes and the moderate Islamists of Ennahda — and labor and employers’ unions agreed this week to start a new economic program, sources said.

No details were available but the parties will meet with President Beji Caid Essebsi at the weekend to discuss details and a cabinet reshuffle, they said. On the table are the options of a small reshuffle or broad change with the departure of Chahed, a technocrat who took office in 2016.

Chahed’s party, Nidaa Tounes, said it supported a full cabinet reshuffle while Ennahda favoured changing only some portfolios for the sake of stability.

Since 2011, nine cabinets have failed to break the economic deadlock. Impatience is rising among lenders such as the International Monetary Fund which have kept the country afloat.

The IMF is due to review the next tranche of its loan plan in June, diplomats said.

Chahed’s office declined to comment, but some of his ministers have said the economy is starting to recover with a first quarter GDP rise of 2.5 percent and tourists coming back.

Chahed in March floated the idea of overhauling loss-making public companies, sparking an outcry from labor union UGTT which has ruled out any sale. The UGTT supports a broad cabinet change, saying Chahed’s government is the worst since 2011.

POWER PLAY

Chahed also came under fire from Hafedh Caid Essebsi, the president’s son and head of Nidaa Tounes, who said the party had no problem with sacking him.

“What stability do you want to maintain; stability in the deterioration of the purchasing power of the Tunisians? The collapse of the value of the dinar? Stability in the absence of any vision of economic reform?”, said Hafedh Caid Essebsi added.

Analyst Jamel Arfoui said the power struggle was about personal ambitions related to disagreements about a campaign against corruption launched by Chahed last year.

More than 20 officials and businessmen were arrested in the crackdown, including Chafik Jaraya, who helped finance Nidaa Tounes campaign in the 2014 elections.

On social media many Tunsians tired of seeing frequent new governments achieving little vented their anger. “Maybe the man (Essebsi’s son) didn’t play enough when he was a child... so he sees Tunisia as a game now,” activist Laila Tobel wrote.

Editing by Ulf Laessing, Editing by William Maclean

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