Banking since the Arab Spring: Tunisia faces pain before reward
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
BANKING

Banking since the Arab Spring: Tunisia faces pain before reward

The World Bank reports that banks need profound reform; analysts catalogue a long list of problems; and the country’s new cabinet has been roundly rejected by most political parties. Can the new president juggle competing political factions and unblock the economic pipeline to bring badly needed growth quick enough?

Beji_Caid_Essebsi

Tunisian president Beji Caid Essebsi 



In December 2010, the events we now call the Arab Spring began in the town of Sidi Bouzid, Tunisia. Beginning with the self-immolation of a young street vendor in protest at his treatment by a municipal officer, the subsequent demonstrations and riots would be felt far beyond that town, leading to regime change in some countries, civil war in others. Looking back, the only place that can claim to have had the peaceful transition to democracy that protesters would have hoped for is the place where it all began: Tunisia.

In December, Tunisia held a presidential election without unrest, following a parliamentary election, also mostly peaceful. So can we call the Arab Spring a success in Tunisia at least? Politically and socially, perhaps, but Tunisia’s economy remains in a dreary state, sluggish and in need of reform. And few things illustrate this more clearly than the banking sector.

“Following the Arab Spring, numerous issues facing the banking system have surfaced,” says Olivier Panic, the lead analyst for Tunisia at Moody’s. He reels off a list. “Weak asset quality, inadequate provisioning, inefficient and under-capitalized public sector banks, inadequate pricing framework, very lengthy and unpredictable banking claim recovery process, and heightened funding and liquidity issues, with banks increasing their reliance on central bank funding.”



Gift this article