EconSource: Tunisia Seeks Foreign Aid Boost, Plans Talks with IMF

Tunisia, frustrated by the international community’s failure to deliver on pledges of economic support, is asking the G8 for a five year rescue program worth $25 billion. Finance Minister Slim Chaker said the aid is necessary to ensure that Tunisia’s political progress is not reversed. The government is under pressure to meet popular demands for higher living standards, but faces budget and external payments deficits. “We are very frustrated with the international community over the support of our special democratic experience… [Managing Director of the International Monetary Fund] Christine Lagarde was one of the few who listened and understands us,” Chaker said. “Tunisia is asking the G8 for a rescue program or Marshall Plan of $25 billion over five years to finance development of infrastructure, support social peace, strengthen security, and reduce the budget deficit,” he said. Chaker said Tunisia would need 3.6 billion dinars ($1.8 billion) of foreign financing in 2016 to cover its budget deficit. [Reuters, 10/27/2015]

Saudi Arabia considers cutting energy subsidies
Saudi Arabia is looking at raising domestic energy prices, Oil Minister Ali al-Naimi said on Tuesday, confirming that the kingdom could cut a subsidy system blamed for waste and surging fuel consumption. Asked on the sidelines of a mining conference whether he expected domestic energy prices to increase in the near term, Naimi told reporters, “What you are asking is: is it under study? And the answer is yes.” Naimi gave no details of the possible changes. In the past, officials have spoken privately of the reforms, but Naimi’s remarks were the first public confirmation by such a senior official that they were under review. The International Monetary Fund estimates Saudi Arabia spends $107 billion annually on the subsidies, including $86 billion on petroleum and $10 billion on natural gas.[Reuters, WSJ, 10/27/2015]

Soaring passport demand nets Syria more than $500 million
The Syrian government said in a report on Monday that it has netted more than $500 million from passport fees this year, after raising charges for passports obtained abroad to bolster foreign exchange reserves. The boost in fees comes amid soaring demand for passports as Syrians attempt to flee to Europe in record numbers. Earlier this year, Damascus eased the process but increased the price of obtaining and renewing passports, requiring citizens abroad to pay $400 for a new passport and $200 to renew one. Inside the country, a new passport costs about $17. When the government announced it was easing the procedures in June, it said the new fees would be “an important source of foreign exchange.” On Monday, Al-Watan said passport fees were bringing in millions of dollars to bolster Syria’s dwindling foreign reserves. It said about 829,000 passports have been issued this year at home and abroad and that passports issued inside the country have netted the government $8 million so far this year. In June, the newspaper said Damascus received some 5,000 passport requests a day from citizens inside and outside the country, a fivefold increase from 2014. [AFP, The Telegraph, 10/26/2015]

Egypt Central Bank seen keeping key rates on hold
The Central Bank of Egypt (CBE) is expected to hold interest rates on Thursday as it balances the need to control inflation with its efforts to stimulate the economy. The decision comes one week after the announcement that CBE Governor Hisham Ramez will be replaced by senior banker Tarek Amer next month. Inflation in Egypt slowed for three consecutive months from June but accelerated again in September. Five economists surveyed all said they expect the CBE’s monetary policy committee to keep rates on hold during their meeting on Thursday. “Inflationary pressures gained pace in September due to rising prices of vegetables, probably leaving the central bank less inclined to increase interest rates, although overall inflation remains largely tame as reflected in the low level of core inflation,” said EFG Hermes Economist Mohamed Abu Basha. “We also believe the recent announcement of the change in governor of the central bank is likely to warrant a stable policy rate before the new governor assumes office later in November,” he added. [Reuters, 10/27/2015]

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