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With the continued influx of refugees from Libya, Tunisia fears its already battered economy will not be able to withstand the extra burden.
The flood of Libyan refugees could lead to a 10% increase in the subsidy bill, Tunisian government spokesperson Nidhal Ouerfelli warned on Saturday (August 2nd), adding that the current economy could not cope with the additional expense.
To escape the security chaos, tens of thousands of Libyan nationals and the country’s foreign workers have recently fled across the border to Tunisia. This is on top of the estimated two million Libyans living in Tunisia since 2011.
Economist Moez Joudi confirmed that foreign trade and the subsidy fund would incur enormous losses. Tunisians would have to share government-subsidised foods and hydrocarbons with the Libyan refugees.
The cost of the subsidy fund reached 6 billion dinars in 2014, a half-billion more than the year before, Joudi noted.
The spike in foreigners fleeing Libya would impact the fund, especially for hydrocarbons, which account for 70% of subsidy costs, he said.
Petrol stations have seen a spike in demand. There is also high demand for consumer goods, leading to shortages in some commodities, especially milk and bottled water.
Tunisian Foreign Minister Mongi Hamdi said last week that the economic situation in the country was not suitable to receiving more of those fleeing the armed confrontations in Libya.
The Central Bank of Tunisia on Tuesday also expressed concern over the potential effect of the Libya crisis on the country’s economy.
Economics professor Abdeljelil Badri confirmed that the unrest in Libya would affect trade with Tunisia. All transactions would stop because they are mostly done by land, he said.
“This poses a direct threat to the future of hundreds of Tunisian companies, which have direct dealings with the Libyan market,” he told Magharebia.
It also aggravates Tunisia’s unemployment problem, since more than 100,000 of its citizens were working in Libya, Badri noted.
One of the biggest companies affected by the violence in Libya is Tunisair.
Libya is the largest market for the Tunisian national carrier. The airline offers more than 60 flights a week to different Libyan airports.
To alleviate the economic fallout of the Libya crisis, Tunisia has presented itself to refugees as a transit point, rather than a permanent destination.
Tunisia has not set up camps for refugees from Libya, as it did during the revolution against Moamer Kadhafi.
Source : Magharebia