Analysis-Tunisia's Saied Poised For More Power But Economy Crumbles

President Kais Saied looks on course to tighten his grip on Tunisia through a constitutional referendum in July, but it could prove to be a poisoned chalice as the economy sinks deeper into crisis and opposition to his rule widens.

Nearly a year since Saied began amassing power, the July 25 referendum is widely expected to boost his authority, in what critics see as a march to one-man rule that has unpicked the democratic gains of Tunisia's 2011 "Arab Spring" uprising.

For Saied, overhauling the 2014 constitution is a corrective to political dysfunction which had afflicted Tunisia since autocrat Zine al-Abidine Ben Ali was toppled. Saied, elected in 2019, promises to protect freedoms and says he is no dictator despite dissolving parliament and ruling by decree.

But fearing the worst, his opponents will boycott the vote, a protest that makes it more likely the referendum will pass. They expect steps to strengthen the presidency and further weaken parliament and the judiciary.

While Saied has focused much of his efforts on remaking Tunisian politics, critics say the former law professor has failed to address a more pressing problem: the economy.

Anger at economic malaise and political squabbling led many Tunisians to welcome his power grab last year.

But hardship has deepened since then, with a fifth of the workforce unemployed and poverty higher than before the Arab Spring.

Delays in public sector salaries and difficulties in paying for wheat shipments have pointed to a squeeze on state finances.

Inflation has hit a record 7.8%.

"The crisis is growing and if it continues, the explosion is imminent," Nejib Chebbi, who heads the main anti-Saied coalition told Reuters, urging national dialogue to prevent "imminent collapse".

Saied's office did not respond to a message seeking comment for this story. He has previously said he is trying to save the economy, blamed corruption for the decline, and promised to recover funds he says were stolen by elites - statements dismissed by opponents as populist rhetoric.

"LOOMING CATASTROPHE"

Despite pressures on Saied, Tarek Megerisi of the European Council on Foreign Relations think tank said he expected the referendum to go ahead and the constitution to pass, noting there was no minimum required turnout.

Saied "will then be faced with a looming economic catastrophe. He doesn't have the support or the governance nouse to build a new political system, and when the economy collapses, you won't have a political system that can salvage it."

With just a few weeks to go, there is little to indicate the major political moment ahead. There are no billboards advertising the referendum. The proposed constitution should be published on Thursday, under a timetable set by Saied.

Omar Boutara, 20, who sells used clothes in a poor part of the capital, said he didn't even know about the referendum. "Young people are lost here," he said.

Marwen El Marweni, 28 and unemployed, said he can barely afford to eat and wants to emigrate to Europe. "Poverty sticks to us" and nothing will change with Saied's constitution, he said.

The economy has suffered several blows. The pandemic hammered vital tourism, before the Ukraine war drove up fuel and food prices, worsening financial pressures.

Unemployment was around 18% last year.

The government hopes to secure a $4 billion loan in talks with the IMF due to start in weeks, in return for reforms including wage freezes. Without reforms, the finance minister says Tunisia may be unable to repay its debts.

But the bailout plan has hit opposition from the powerful UGTT union, which rejects the reforms, paralysed Tunisia with a June 16 strike and vows further action. The UGTT has yet to take a stance on the referendum.

"NO DEMOCRACY"

Saied's moves have prompted concern in the West, which looked to Tunisia as the only success of the Arab Spring that elsewhere ended in conflict and renewed repression.

For his opponents, including the Islamist Ennahda party, the referendum looks set to mark another blow. They have been on the back foot since last year, decrying Saied's actions as a coup but struggling to counter him.

Adding to speculation the new constitution will clip the wings of parliament and the judiciary, Saied has said it will define "jobs" rather than "powers", suggesting a diminished standing for both.

He has also signalled changes to language about Islam, with a phrase which Islamists have long argued defines Islam as the state religion to be replaced with one saying that Islam is the religion of the "umma", a reference to the Muslim world.

Banned under Ben Ali, Ennahda moved to the heart of power after 2011. But it now sees early signs of a crackdown - something Saied's opponents have long feared but which has not materialised in a major way.

Former prime minister Hamadi Jebali, once an Ennahda member, was held for four days in June, over what his lawyer said were accusations of money laundering, and a move Jebali said was politically motivated.

The Interior Ministry has declined to comment on his arrest.

Judges have similarly denounced as political Saied's sacking of dozens of judges accused of corruption and protecting alleged terrorists.

Ali Laryeadh, another former prime minister of Ennahda, said Tunisia was in crisis last year, but with "no democracy" and poverty getting worse, "we are in a disaster now."