FILE PHOTO: People rally in Tunis during a nationwide strike against the government's refusal to raise wages,January 17, 2019. PHOTO CREDIT: Reuters

TUNIS – Tunisia raised the minimum wage for industrial and farm workers as well as pensions for hundreds of thousands of private-sector retirees by 6.5 percent on Wednesday in a move to defuse discontent over economic hardships.

Thousands protested on Monday in the central city of Sidi Bouzid against marginalisation and deteriorating economic conditions. Hundreds of disgruntled young people also rallied in the northern city of Kef on Tuesday, demanding jobs.

A government statement said Prime Minister Youssef Chahed had approved a rise in the monthly minimum wage for industrial and agricultural workers of 6.5 percent to 403 dinars (£102).

A 6.5 percent rise in pensions for 700,000 retirees in the private sector was also approved.

Hundreds of retirees demonstrated in front of parliament this week demanding higher pensions to counter rising inflation and declining purchasing powers.

Chabad’s decision came in the face of pressure from Tunisia’s foreign creditors for a freeze in wages in the public sector, which includes some industrial workers, to reduce its large budget deficit.

The North African country has been hailed as the Arab Spring’s only democratic success story because protests toppled autocrat Zine El Abidine Ben Ali in 2011 without triggering violent upheaval, as happened in Libya, Egypt and Syria.

But since then, nine cabinets have failed to resolve Tunisia’s economic woes including high inflation and unemployment, and impatience over its slowness in carrying out reforms is rising among lenders such as the IMF.

The IMF has pushed Tunisia to freeze public-sector wages – the bill for which doubled to about 16 billion dinars ($5.5 billion) in 2018 from 7.6 billion in 2010 – to reduce them from about 15.5 percent of GDP now to 12.5 percent in 2020.

They also want Tunis to trim spending to help reduce its heavy budget deficit, though such steps risk adding fuel to public anger over joblessness and poverty.

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