Impact of structural adjustment and austerity measures imposed by Bretton Woods Institutions on Women’s welfare and social safety nets

Structural adjustment in Tunisia

As a result of an economic policy advocating openness and liberalization starting from the early seventies, Tunisia experienced in the 1980s an economic crisis characterized by a budget deficit of 5.2% between 1981 and 1986, a decline in exports and low commodities prices, at a context expenditures surged to 40% of GDP in 1985-1986, with a debt ratio at 63% of GDP in 1986.

Tunisia begun implementing austerity measures prescribed by the IMF, including ending bread subsidies that led to the 1984 bread revolution. The IMF expressed its satisfaction with the austerity measures prior to the launch of the structural adjustment program and called for the implementation of more liberal reforms[1]. The general crisis offered a chance for global financial institutions to impose a structural adjustment program[2], incorporating the following measures:

• Deregulating the economyand promoting liberal policies to attractforeigninvestmentina bidtoreducethebalanceofpaymentsdeficit;
• Introducing the value added tax and reducing income tax as part of a larger tax reform;
• Privatizing public institutions;
• Cutting public spending, including subsidies, to enable fiscal spaces for debt payment;
• Liberalizing prices and interest rates as well as the dinar exchange rate, in tandem with the privatization of banks[3];

These measures resulted in the launch of an era of economic policies aimed at integrating Tunisia into the global economy, following a liberal pattern that seeks to reduce state intervention in the economy, while reducing public spending, including on vital sectors such as health and education. Since then, Tunisia has followed a tack of engagement in globalization through signing agreements, such as the Association Agreement with the European Union in 1995, which introduced free trade principles in a range of sectors in preparation for a comprehensive free trade agreement that the Tunisian government and the European Union tried to seal in the years of democratic transition.

Tunisia also signed an agreement with the IMF in 2013, under which it committed over the past decade to a set of “reforms”, part of a an IMF ready-made recipe that it imposes in all contexts, the most prominent of which are summarized as follows:

• Reducing the public payroll, which the IMF urged from 2012 to 2020;
• More exchange rate flexibility which came in 2012-2014 and from 2016 to 2019;
• Corporate tax cuts (mentioned in 2012, 2013 and 2015);
• Reform of the banking sector (2012-2019);
• Restructuring state-owned banks (2012-2016);
• Central bank reform (2012 and 2014-2018);
• Cutting spending on public services (2013-2017);
• Gradually cutting energy subsidies (2012-2020);
• Promoting public-private partnerships (2013-2016);
• Upgrade of state-owned enterprises and privatization (2014-2019).

Worsening social and gender inequalities

The surge in inequality between the rich and grassroot strata has been among the adverse impact of these above mentioned “reform”. Inequality is also manifested in gender affecting women rights. For instance, public spending cuts led to a lack of doctors, with only 12.9 physicians[4] per 10,000 people. With this average, Tunisia is underperforming compared to middle-income peers, whose average is above 25, compared with 35 in high-income countries.

This indicator insufficiently reflects the degradation of the public health sector, which has a ratio of 6 physicians per 10,000 inhabitants, unevenly distributed between coastal and inland areas. The national average of specialized doctors stands at 6.63 doctors per 10,000 inhabitants in 2019. The percentage plummets to 1.9% in the southwest, 1.8% in the northwest and 1.6% in the center west. These disparities are exacerbated when looking into specific specialties, wherein the density index of obstetricians and gynecologists does not exceed 2.91 physicians per 10,000 inhabitants. These indicators highlight the seriousness serious situations, such as the continued absence of obstetrician and gynecology specialist in the wilaya of Tataouine for several years.

Most citizens rely on the public sector to access health services, given the high cost of medical treatment in the private sector and the problems facing the Tunisian insurance system.

On a broader level, social inequality takes a gender dimension in many respects:

• Feminizing poverty and unemployment: The problem with estimating women’s poverty accurately lies in the methods used by national statistics across the world, including in Tunisia, where data is collected based on households instead of gender. However, the multi-level analysis of poverty in Tunisia shows that male-led households are 34% less likely to experience extreme poverty than female-led households. Women also suffer from unemployment more than men, with unemployment rates of 22% for females compared to 13.6% for males. The percentage of active women does not exceed 30.3% due to structural reasons. This reality has social consequences reflecting in confining women to unpaid domestic work, school drop outs and the exclusion from social protection. A study by the International Alert on the access of young men and women to health indicates that 40.1% of young women had their health treatment card in the name of their husbands, which reduces their financial and social independence.
• Inequal salaries and gaps in access to leadership positions: Women are more represented in the social and health sector jobs at 63.4%. However, only 39% of them are in leadership roles[5]. Women also take most jobs in the farming sector at 58%, with only 4% of them owning the land. Tunisia is no exception as far as the gender pay gap in the private sector is concerned, with 35.5% of women working in the informal sector and 25.4% in the formal sector[6].
• Unpaid work: As is the case globally, austerity measures resulted in the deterioration of public care services, benefiting the elderly, people with special needs and children. This meant that women had to take on the unpaid role of social care at home. During the Covid pandemic, the lockdown was imposed in March 2020, with the closure of all health and social assistance services for the elderly and the disabled, leaving women with additional burden to perform these services.
• Deteriorating access to sexual and reproductive health: spending cuts on public health, due to austerity measures, led to the deterioration of health services in general, especially sexual and reproductive health, which have been undermined by the lack of medicine inventories and insufficient campaigns to raise awareness about sexual health. For instance, in 2014-2015, there was a drop in the use of contraceptives from 62.5% in 2012 to 50.7% in 2019. There was also a sharp shortage in the availability of some contraceptives in the market between 2016 and 2019, in addition to morning-after pills and medicines to treat abortion.

This is how austerity policies have contributed to exacerbating social inequality in relation to poverty, unemployment and access to basic services. This injustice takes on a gender-based character and adds to the discrimination and structural economic violence to which women are subjected. As is the case globally and regionally, the Tunisian case proves that countering the policies of the Bretton Woods institutions should be at the heart of feminist actions.

[1] Murphy, E. (1999) Economic and Political Change in Tunisia: From Bourguiba to Ben Ali. London: Macmillan Press LTD, p. 74.

[2] The impact and influence of international financial institutions on the economies of the middle east and North Africa, ed. By Tarek Radwan (2020)

[3] Moore, C.H. (1991) ‘Tunisian Banking: Politics of Adjustment and the Adjustment of Politics’ in Zartman, I.W. (edited by Tarek Radwan) Tunisia: The Political Economy of Reform. SAIS African Studies Library, pp. 70-71

[4] Tunisia’s statistics institute 2021

[5] UN Women 2020.

[6] Idem.