Tunisia: US may suspend $500m grant over democratic backsliding under President Saied

By Julian Pecquet
Posted on Friday, 26 August 2022 06:32

Tunisia's President Kais Saied, in Brussels, Belgium February 18, 2022. REUTERS/Johanna Geron/Pool

The US is considering suspending $500m in economic aid to Tunisia as backlash over democratic backsliding under President Kais Saied continues to grow.

The Millennium Challenge Corporation (MCC) is set to decide whether to suspend a grant programme to strengthen Tunisia’s transportation, trade and water sectors at its next quarterly board meeting, according to the top US senator on the foreign aid panel.

The MCC is an independent agency that invests in low-income and lower-middle-income countries. The agency had unanimously approved a five-year compact with Saied’s government – Tunisia’s first – in June 2021 that sought to facilitate trade with Tunisia by investing in the Port of Rades outside Tunis and the country’s groundwater resources.

At the time, US Agency for International Development (USAID) Administrator Samantha Power gushed that the compact “constitutes an affirmation of Tunisia’s commitment to constitutional democratic governance and equitable prosperity at a critical time in Tunisia and the broader region.” Since then,  however, the president of a country that the US had championed as the sole success story of the 2011 Arab Spring has dissolved parliament, purged the judiciary, jailed opponents and critics and pushed through a new constitution that gives him much greater powers.

“The Millennium Challenge Corporation is going to be considering this fall whether to suspend a $500m compact that was to be dedicated to port and infrastructure development based on these challenges around democracy,” Senator Chris Coons, a Delaware Democrat, told reporters on 24 August upon his return from leading a six-member congressional delegation to Africa during which he met with Tunisian civil society leaders.

“President Saied committed in our direct conversation to holding inclusive, free, and fair elections for the parliament this fall, and I’m hopeful he will do so which will help address some of the express concerns that Tunisians of a wide range and international observers have commented on.”

Deputy CEO Mahmoud Bah testified before Congress in October 2021 that “we are watching what is happening on the ground and with the nomination of a new prime minister [Najla Bouden], we are hopeful that they will come back to a democratic path.” The agency declined to discuss its next board meeting as the agenda has not been finalised.

Last straw

During its week-long trip, the bipartisan delegation of House and Senate members also visited Kenya, Rwanda, Mozambique and Cabo Verde. They were accompanied by the new CEO of the MCC, Alice Albright, who was confirmed by the Senate in February.

To reward Tunisia, to give them this money, when they have actively made decisions that go against what this money is meant to be for … that would be, I think, a really bad move and would make MCC lose a lot of credibility.

Coons’ remarks carry particular weight as he chairs the Senate panel that controls funding for foreign aid while also sitting on the Senate Foreign Relations Committee. His warning to Saied comes as both Congress and the Joe Biden administration have been turning up the pressure.

  • In May, the State Department released a budget request for the fiscal year starting 1 October that cuts economic support for Tunisia by almost half, from $85m to $45m, “in light of uncertainty regarding Tunisia’s political direction.”
  • The previous month, a dozen foreign affairs leaders in the House of Representatives wrote to their colleagues on the appropriations panel asking them to condition security assistance to progress on democracy and human rights.

The MCC can suspend assistance if a country is acting against US national security interests; has failed to adhere to its responsibilities under its compact; or is engaged in a “pattern of actions inconsistent with the criteria used to determine the eligibility of the country.” These include political rights and rule of law indicators such as free and fair elections, an impartial legal system and a credible political opposition.

Impact statement

Sarah Yerkes, a senior fellow in the Middle East Program at the Carnegie Endowment for International Peace in Washington, has previously opined that ending security assistance would not reverse Saied’s “authoritarian takeover.” But she tells The Africa Report that the MCC would be right to formally suspend the Tunisian compact given Saied’s rollback of political rights and civil liberties.

“While I have said I don’t think cutting aid is the right decision, I do think they need to stick to the facts here,” Yerkes says. “To reward Tunisia, to give them this money, when they have actively made decisions that go against what this money is meant to be for … that would be, I think, a really bad move and would make MCC lose a lot of credibility.”

Suspension, she adds, is a big deal given the sums involved and the years of work involved by both US and foreign authorities to get approval for a compact. Ironically, funding for Tunisia’s compact never started flowing in part because Saied suspended parliament before it could be ratified.

“Rhetorically, diplomatically, it sends a big message,” she says. It’s “saying we have evaluated you using .. scientific criteria, and you no longer qualify.”

The $500m, she adds, is a “lot of money” for “projects that matter.”

“It’s certainly going to anger a lot of Tunisians who want to see that money flowing in, in a country where they’re really every day getting worse and worse and closer and closer to economic collapse,” she says.

It also sends a warning to other troubled countries in the region.

“It doesn’t just matter for Tunisia,” Yerkes says. “There are a lot of other would-be autocrats or existing autocrats who are paying attention and seeing that Tunisia’s getting off pretty easy, that Kais Saied had a pretty easy road to walk through and destroy a decade’s worth of democratic progress.”

Finally, Yerkes notes that the timing would be particularly bad for Tunisia as the cash-strapped country hopes to qualify for $4bn in loans from the International Monetary Fund.

“They desperately need as much international assistance as they can get,” she says. “This is also coming simultaneously along with the IMF discussions, and for the MCC to determine that Tunisia no longer qualifies, and they’re no longer able to get that funding, potentially has the impact of scaring off some other investors. And potentially could impact IMF discussions as well.”

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