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End of mission statement by the United Nations Independent Expert on the effects of foreign debt on human rights, Mr. Juan Pablo Bohoslavsky, on his visit to Tunisia

Arabic

Tunis, 28 February 2017

Today I end my official visit to Tunisia which began on 20 February 2017. I would like to thank the Government of Tunisia and its institutions for their full cooperation during the visit.

I have benefitted from discussions with senior representatives of the Ministry of Foreign Affairs, the Ministry of Finance, the Ministry of Development, Investment and International Cooperation, the Ministry of Justice, the Ministry for Constitutional Entities, Civil Society and Human Rights, the Ministry for Social Affairs, for Vocational Training and Employment, for Public Health and the Ministry for Education. In addition I met with the Central Bank of Tunisia and its Commission for Financial Analysis (Financial Intelligence Unit), the National Institution for the fight against Corruption, the Truth and Dignity Commission, the Commission for Human Rights and Fundamental Freedoms, the Secretariat for State Properties. My programme also included meetings with Members of Parliament, the Tunisian General Labour Union (UGTT), with representatives from the International Monetary Fund and the World Bank and from civil society and academics. I would like to thank all my interlocutors for taking the time to meet with me and for our open and frank dialogue.

My visit had two broad aims:

  • to learn to what extent the countries’ economic and financial difficulties are impairing the enjoyment of human rights, in particular economic, social and cultural rights;
  • and to assess the impact of illicit financial flows on the enjoyment of human rights.

This included discussing if and how economic reform policies supported by international financial institutions could contribute to a further consolidation of human rights in the country. 

I will submit a comprehensive report on my visit to Tunisia to the United Nations Human Rights Council in March next year. During this press conference I would like to share with you some of my preliminary conclusions.

Reducing public debt to social sustainable levels

Tunisia is facing challenging times. A difficult global economic environment coupled with a crisis in the tourism sector following terrorist attacks in 2015, have resulted in sluggish economic growth and decreased tax revenues. In an effort to ensure social stability after the revolution public expenditures have grown significantly, in particular the public payroll. According to the International Monetary Fund, the public debt of Tunisia has increased to over 60 percent of GDP and is expected to reach more than 70 percent of GDP in 2017. Latest unemployment statistics published by the National Institute for Statistics for the 4th quarter of 2016 indicate an unemployment rate of 15.5 percent. Women (23.1 %) and graduates (30.9 %) struggle in particular to find decent employment in the formal economy1. Regional disparities in economic development, access to work, quality health care and education have remained strong.

Responsible lending and borrowing, transparency and public participation are crucial for ensuring that public resources are directed towards realizing human rights and to the achievement of the Sustainable Development Goals. Public debt should not create economic, social or political vulnerabilities, but contribute to inclusive social growth and development.

Debt indicators need to be closely monitored, as debt levels are entering into a critical zone. Tunisia’s international lenders should be encouraged to provide additional debt relief to Tunisia in order to reduce public debt service and free resources for public investment according to a broadly discussed national development strategy. Debt sustainability analysis should be based on a comprehensive understanding of debt sustainability, incorporating human rights and social and environmental dimensions.

Economic adjustment should follow a human rights-based approach

There is a general consensus that the efficiency and responsiveness of public administration and services to rights-holders needs to be improved, and that public finances should be consolidated. Yet, further social consensus is necessary to ensure national ownership for the implementation of economic reforms that are being negotiated between the International Monetary Fund and the Tunisian Government. This includes reinforcing parliamentary participation in the design and approval of macro-economic reform packages before lending agreements are concluded. Whether austerity measures and deregulation work while the economy is weakening2, is a question that needs to be answered in a national participatory process, in particular if political stability and social cohesion are at stake.  

Human rights standards binding on Tunisia provide a framework against which proposals for reform need to be assessed. Austerity measures that would reduce the enjoyment of economic, social and cultural rights are under international law only justifiable if they are unavoidable, necessary and proportionate, in the sense that the adoption of any other policy or failure to act would be more detrimental to economic, social and cultural rights. They should remain in place only insofar as they do not result in discrimination; mitigate inequalities and ensure that the rights of disadvantaged and marginalized individuals and groups are not disproportionately affected. Most importantly they should never undermine the minimum core content of the rights protected under the International Covenant on Economic, Social and Cultural Rights3.

In this regard, it is pertinent to raise a main conclusion of my latest thematic report to the Human Rights Council: Overall, there is no empirical evidence that austerity-related labour market reforms (for example, freezing or reducing wages and minimum wages) result in increased economic growth, employment or in a better situation for workers4.

Past failures should not be repeated

The notion of inclusive growth was absent in past IMF adjustment programmes implemented during the Ben Ali period in Tunisia. The assumption was that economic growth would alone improve living standards. It did to some extent, however, the problem was that these reforms did not improve living standards for all people in the country. Many people have been left behind. These mistakes should not be repeated.

There is now a clear commitment to social inclusive growth in the official programme documentation of the IMF and World Bank. However, it can be questioned whether conditionalities and benchmarks included in the current 2.9 billion economic reform programme reflect as clearly a departure from past policies. In my view, adjustment measures should be based on the vision of long-term social, political and financial stability and reform policies should be informed by the Sustainable Development Goals of the United Nations and a human rights-based approach to development.

Economic reforms need to be implemented on the basis of a more realistic time table. Moreover, priority should be given to create jobs for women, young job seekers and persons with disabilities, in the most disadvantaged regions. I welcome in this context the new active labour market programmes, including the Dignity Contract, aimed at establishing decent work for long-term unemployed people in the private Sector. 

A rights-based approach to social security reform

There is a need to ensure the financial sustainability of the pension and social security funds and to close gaps in the social security net of Tunisia5. This includes establishing a social insurance system against unemployment. A national strategy for combatting poverty should be developed based on disaggregated data on poverty. In this context I have been informed that a study on multiple dimensions of poverty has already been undertaken in collaboration with UNDP. I hope that the collected data will soon be released to the public.

Pension and social security benefits should ensure that rights holders are at the very least moved out of extreme poverty. Social welfare benefits should be better directed to those who need them most. The reform of the social protection system should follow a human rights based approach and continue to be guided by the ILO Social Protection Floors Recommendation6. In this context, particular attention should be given to improve the labour and social protection of rural women in Tunisia7.7

Rights holders must also be empowered to access justice and effective remedies if public authorities fail to provide them social security benefits to which they are entitled. The State must ensure in this respect non-discriminatory treatment throughout its entire territory. Spending ceilings should not have as a consequence that in some regions eligible applicants are excluded from social assistance because funds allocated to a particular region or municipality have been exhausted.

Ensuring transparency, participation and justice in budgeting and taxation

Efforts to reduce the costs of the public sector wage bill through fewer employees in the public sector should not result in paralyzing reforms in the public sector, prevent addressing staff shortages in health clinics and hospitals in rural areas, boosting staffing in tax administration and labour inspection or for investigating and prosecuting corruption and economic crimes. Priority should be given to realign financial and human resources within the public service, instead of freezing recruitment across the board or retrenching people employed in the public service.

As indicated by the Open Budget Survey 2015 further improvements need to be made to increase the transparency of the public budget, to provide the public and legislature with more opportunities to engage in the budget process and improve auditing of the public budget8.

The principle of social justice should be the pillar of the tax reform in the country. This should include a more progressive personal income tax with lower rates for low-income people, and a more efficient and fair tax administration that would ensure that large tax payers meet fully their tax obligations, as foreseen by the current economic reform programme of the Tunisian Government.

Assessing the human rights impact of economic reform policies

In this context I would also urge international financial institutions and the Government of Tunisia to undertake social and human rights impact assessments before implementing major economic reforms as required by the United Nations Guiding Principles on foreign debt and human rights9.

Let me provide an example. There is a need to assess and monitor how the economic crisis, cost containment measures and corruption, affect the provision of public health care services to rights holders in Tunisia. Apparently no such monitoring is currently taking place. It is however essential to know, where and for what reasons some rights holders cannot have access adequate health care services, facilities or goods. There can be many reasons: for example rights holders cannot afford health care services; high co-payments or bribes undermine access to them; some public institutions, in particular in rural areas have a shortage of medical staff, or certain public health care infrastructure and facilities may be deteriorated. Such analysis is essential in order to reform and improve the public health system based on our shared vision of a health care system that provides universal access for all.

Another example: if energy or food subsidies are abolished or reduced, there is a need to protect low-income households from the adverse impacts of such reforms to ensure that energy or food remains affordable. Gradualism, efficiency, social justice and consultation should be the pillars of any subsidy reforms.

Reducing public deficits by curbing corruption and illicit financial flows

Fighting corruption and illicit financial flows needs to remain a top priority10.> According to a survey conducted last year, 64 per cent of all Tunisian respondents claimed that corruption has increased over the last 12 months, despite many efforts by the Government to tackle corruption11. Not only corruption, but also tax evasion and transfer mispricing contribute significantly to illicit financial flows in Tunisia. According to Global Financial Integrity, illicit financial outflows from Tunisia amount to nearly 2 billion USD per annum12. Strengthening customs inspections, tax authorities and adequate capital controls could assist reducing this drain.

Academic research has estimated the total illicit capital flight from Tunisia to have reached 38.9 billion USD over the period 1960-2010, 33.9 billion USD during the Ben Ali regime13. Several countries have frozen the assets that have been siphoned abroad by the Ben Ali regime, but to date the amounts repatriated to Tunisia have been rather disappointing. I therefore call upon the international community to adhere to their legal obligations under the United Nations Convention Against Corruption and to ensure a timely return of stolen assets to Tunisia. International cooperation is at stake.

I would like to commend the Tunisian Government for strengthening its independent National Anti-Corruption Institution last year with more staff and financial resources to enable this institution to discharge its mandate. I hope that its institutional capacities can be further strengthened when this institution will be transformed into an independent constitutional body for good governance and combatting corruption as foreseen by the new Constitution. I am however concerned about the inadequate resources and staffing provided to the Judicial and Financial Pôle charged with prosecuting money laundering, corruption and financial crimes.

I welcome that last week new legislation to protect witnesses and whistle blowers has been passed by the Tunisian Parliament. I also hope that a law will be passed in the near future that will require public officials to make comprehensive asset declarations, prevent illicit enrichment and conflict of interest.

Establishing accountability for financial complicity and past economic crimes

Let me express my appreciation for the efforts made by the Truth and Dignity Commission providing a voice to victims of past human rights violations. I welcome that the Truth and Dignity Commission is also investigating violations related to economic and social rights, including labour rights, and that its mandate covers as well investigating financial corruption and the misappropriation of public funds. The Truth and Dignity Commission has a comprehensive and challenging task, and deserves the full support of the international community. In no ways there should be impunity for large scale misappropriation of public funds. Individual accountability for severe financial crimes during the Ben Ali regime needs to be ensured.

In this context I would like to underline the importance of establishing as well accountability in the banking sector. There appear to have been to date no sanctions against financial institutions, nor investigations against individuals who assisted the former regime in financial transactions related to past corruption and misappropriation of public funds.

The role and responsibility of foreign lenders and donors which financially assisted the Ben Ali’s regime for many years should also be critically examined in the context of transitional justice14. In this context I would like to support proposals tabled in Parliament to undertake a public debt audit and encourage the Truth and Dignity Commission to look into this dimension.

Integrating UN goals and recommendations in reform policies

I would like to reiterate the recommendations made last year by the Committee on Economic, Social and Cultural Rights1. This includes ensuring that the Commission for Human Rights and Fundamental Freedoms is fully compliant with the Paris Principles and covers economic, social and cultural rights. I encourage the Commission to deepen its work on human rights and economic policies. I urge as well Tunisia to ratify the Optional Protocol to the Covenant on Economic, Social and Cultural rights, providing rights-holders with the right to make individual complaints after exhaustion of domestic remedies.

I encourage the Tunisian government to continue integrating the Sustainable Development Goals (SDGs) in their National Development Plan with support of the country team of the United Nations.  Macro-economic reform programmes implemented in collaboration with international financial institutions should also be guided by the SDGs and binding human rights obligations of Tunisia. Bilateral and multi-lateral institutions can contribute to this, by aligning their lending to priorities identified by the SDGs and the Tunisian Government.

Investing in social rights will make Tunisian democracy a success

Denial of human rights, corruption and non-inclusive social development triggered the Tunisian transition to democracy.  I would like to recall that the Arab spring was mainly sparked by young people of Sidi Bouzid. Unemployment, the perception of corruption at higher levels of the state, and social and regional inequality ignited the anger as much as the lack of civil and political rights.

The Tunisian transition to democracy stands out in the region. The revolution of 2011 has resulted in significant improvements of civil and political liberties. In 2014 a new Constitution enshrining international human rights standards was adopted and general elections were held. Liberties gained should not be undermined by uneven progress in the field of economic, social and cultural rights.

Progress in the field of civil and political rights may become fragile, if Tunisia does not receive the necessary support and investment to ensure tangible improvements in the social and economic sphere.

Economic and social rights should therefore be the top priority of international financial institutions, bilateral lenders and Tunisian authorities. Investing in these rights is the best investment for preventing violent extremism and political instability.

Human rights, social justice, and accountability should not be forgotten when setting an enabling environment for productive domestic and foreign investment. They are a prerequisite for inclusive growth.

Thank you.


Notes:

1. INS, Indicateurs de l’emploi et du  chômage,  Quatrième trimester 2016, http://www.ins.tn/sites/default/files/publication/pdf/Note_ENPE_4T2016.pdf

2. See for example “World Economic Outlook. October 2012. Coping with High Debt and Sluggish Growth,” IMF, 2012, WDC, available  at https://www.imf.org/external/pubs/ft/weo/2012/02/pdf/text.pdf

3. See Statement of the Committee on Economic, Social and Cultural Rights on Public Debt, UN Doc. E/C.12/2016/1.

4. See UN Doc.  A/HRC/34/57.

5. See as well the study of the Office of the High Commissioner for Human Rights « l’aproche basée sur les droits de l’homme du système de sécurité sociale tunisien », available at   https://issuu.com/dorraloudhaief/docs/rapport

6. http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_ID:3065524

7. See the recommendations contained in the joint study conducted by the Office of the High Commissioner for Human Rights, UN Women and the Tunisian Ministry for Women, Family and Childhood: « Travail des femmes en milieu rural et leur accès à la protection sociale, 2016 ».

8. Country Sheet Tunisia, http://www.internationalbudget.org/wp-content/uploads/OBS2015-CS-Tunisia-English.pdf

9. UN Doc A/HRC/20/23

10. On the relationship between illicit financial flows with human rights, see A/HRC/31/61

11. Transparency International, People and Corruption: Middle East & North Africa Survey 2016, Global Corruption Barometer, available at www.transprency.org.

12. http://www.gfintegrity.org/illicit-financial-flows-corruption-sustainable-economic-development-tunisia

13. https://www.peri.umass.edu/publication/item/486-capital-flight-from-north-african-countries

14. See the report on financial complicity by the Independent Expert, UN Doc. A/HRC/28/59.

15. Concluding Observations, Tunisia, UN Doc. E/C.12/TUN/CO/3.