Speaking to Tunisie Numérique, economic expert Ridha Chkoundali talked about the visit of the President of the Republic, Kais Saied, to China and the extent of its significance for Tunisia, particularly at the level of the possibility of concluding several investment agreements, valuing trade exchanges, and the possibility of getting financing or loans as well…
The possibility of Tunisia joining the BRICS group
Chkoundali stated that it must first be taken into account that China is the major influence on the BRICS level, and if Tunisia desires to join this group as Algeria did, it is essential to take into account the strengths of Tunisia and Algeria as well, as the latter has wealth from… Oil and gas which become strongly in demand by China because both are considered critical after the Russian-Ukrainian conflict on a global level in light of the difficulty of obtaining them, and at the level of China, whose economy has started to record high growth rates.
Prospects for Tunisia entering into a partnership with China
He emphasised that China could consider establishing cooperation with Tunisia and Arab countries in general, especially in the investment of renewable energies. This initiative is considered highly effective for Tunisia, especially in light of the substantial trade deficit observed over the past four years. In the first few months of this year alone, the trade deficit reached 4.8 billion dinars, with the energy deficit accounting for 4 billion dinars. This highlights the importance of negotiating with China in the field of renewable energies.
He also remarked that Tunisia faces important challenges related to the accumulation of debt. There are issues involving the mobilization of external resources in hard currency, which are largely due to disrupted negotiations with the International Monetary Fund and the decline in the Tunisian sovereign rating. These factors necessitate the search for alternative sources of borrowing.
The Tunisian-Chinese trade deficit… How can Tunisia overcome it?
The trade deficit between Tunisia and China is considered extremely large, our speaker said, while Tunisia was able to accomplish a surplus with several European countries such as Germany, France and Italy, and the main reason for this is that these countries have investments and companies in Tunisia, while for China there are no companies in Tunisia that export from Tunisia.
To reduce the deficit, negotiations with China must go beyond merely lessening the trade deficit and should not solely use methods that primarily benefit China by allowing it to market its products in the Tunisian market. This is especially relevant as China, having achieved significant growth rates, is seeking new markets. Thus, Tunisia must prioritize its interests during negotiations and convince the Chinese side to invest in Tunisia, similar to the investment models seen with Germany, France, and Italy.
The economist stressed that turning towards China should not be seen as a substitute for dealings or trade with Western entities, such as the European Union, the International Monetary Fund, and the World Bank. Instead, Tunisia should seek to engage with both parties, expanding partnerships rather than replacing them, to maximize opportunities for the Tunisian economy.
Is it possible to borrow from China to pay off Tunisian debts in hard currency?
As for this point, Chkoundali considered that TOS is currently suffering from major issues in the process of repaying debts in hard currency, but it should also be remarked that China or other BRICS countries are not the most suitable solution and cannot do so because these countries do not provide loans in dollars. Or in euros, and Tunisia’s debts in hard currency.
He added that as for the Development Bank, Tunisia has been implicated in it since 2022, and this is not considered a new agreement for the country, in addition to the fact that this bank funds infrastructure projects and does not provide direct loans, and the situation is that Tunisia is currently suffering from problems at the level of the state budget.
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