"Congratulations, you are the Minister of Finance"

Reuters News
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Posted: Jun 22, 2011 5:36 PM
"Congratulations, you are the Minister of Finance"

By Daniel Bases

NEW YORK (Reuters) - As Jalloul Ayed describes it, he literally answered the call of his country... in the lobby of a random London office building on a Thursday afternoon in January.

Two weeks after a popular revolt in Tunisia ended President Zine al-Abidine Ben Ali's 23-year autocratic rule, Ayed, an affable U.S.-educated banker with a passion for classical music, was told he had been named finance minister -- over the din of a London street on his way to the subway.

That was after a local radio announced members of a new cabinet with Ayed in the crucial role as finance minister.

Warned by an assistant to then interim prime minister Mohamed Ghannouchi to expect a call, Ayed thought he might be asked for some advice.

"I got the call as I was walking out of my office going to the tube station, you know, and the Prime Minister did call me ... He said, 'Congratulations, you are the minister of finance,'" Ayed told Reuters in an interview on the sidelines of the New York Forum on Tuesday.

"I said fine ... so I answered the call of duty. It is a call of your country. Tomorrow, if it is a call of a party, I don't know," said Ayed, a married father of three.

Ayed, 60, is careful to burnish his image for impartiality and non-party affiliation. He spent 23 years -- ironically the same amount of time as Ben Ali's reign -- working for Citibank and, just prior to his appointment, Banque Marocaine du Commerce Exterieur (BMCE) in the Gulf and in London.

He has survived two interim governments and says he will remain in place at least through the constitutional changes process.

Focusing on work rather than party politics, Ayed said he is pushing ahead with a restructuring of regulations and banking laws. It is an attempt to spur a diversification of the economy away from its traditional base in tourism and exports of value-added export materials such as textiles or electronic components.

Tourist numbers are expected to fall to 3.5 million, he said, compared with 7 million tourists in 2010 who together brought in 3.5 billion dinars ($2.55 billion) in revenues.

"It is a strategic objective ... Today (technology) is about 25 percent of exported products and we want it to go up to 50 percent," he said.

According to Ayed, Tunisia's 700,000 unemployed include 165,000 citizens with advanced degrees and few choices for jobs. Tunisia's tourism industry employs 1 million people, providing subsidence to 3 million, Ayed said, out of a population of 10.5 million.

Tunisia is currently paying the unemployed but educated citizens a monthly stipend of about 200 dinars to help them remain active job seekers, while also developing vocational/educational retraining programs to build skills.

INVESTMENT FUNDS

On Saturday, at a rescheduled cabinet meeting of interim Prime Minister Beji Caid Sebsi, Ayed said he will present plans for two "large investment vehicles" to help spur economic development.

"I was very surprised when I came back to Tunisia, 23 years later, that we really did not have such large investment vehicles," said Ayed.

One fund will be publicly sponsored and will focus mainly on infrastructure projects. A second fund, seeded with about 2.5 billion dinars of government money, called the Generational Fund, will work with the private sector to invest in Tunisia.

He expects the economy to grow at maximum of just 1 percent in 2011 but is targeting 6 percent growth in 2012.

On Tuesday, the World Bank reported it signed off on a $500 million loan to help jump-start the economy.

Another personal priority is to bring some harmony to a tax system that costs off-shore export businesses relatively little while taking up to 30 percent from on-shore businesses.

"I think there is room to lower that and improve a lot more discipline in tax collection," he said.

BORDER AND BUDGET STRAINS

The protests in Tunisia that led to the fall of Ben Ali sparked an "Arab Spring" wave of popular uprisings across North Africa and the Middle East are still reshaping the political and socio-economic landscape.

After Ben Ali, Egypt's Hosni Mubarak was toppled in February after nearly 30 years in power. Protests continue in Bahrain, Syria and Libya, where NATO engaged an aerial bombardment to defend civilians from their own ruler, Muammar Gaddafi.

In the wake of the violent uprising and military actions in oil-rich Libya to Tunisia's east, nearly half a million people crossed the border, Ayed said, although many have been taken in by families, stayed in hotels or rented apartments.

The government is trying to accommodate between 16,000 and 17,000 refugees, mainly non-Libyan migrant workers from Eritrea or Somalia who crossed the border and remain in camps.

That is in addition to the 45,000 Tunisians living in Libya who fled back to their homeland.

"We paid 10,000 families about 600 dinars per family and 300 dinars per person," he said.

"We still have some strain on the budget for a variety of reasons, but this one exacerbates the situation from an already difficult situation," he said.

(Reporting by Daniel Bases; Editing by Gary Hill)