AFP Asia Business

‘Got cash?’ Tunisians grapple with new restrictions on cheques

Olfa Meriah stands, frustrated, before a smartphone shop near the capital Tunis. How can she buy a phone in instalments, she wonders, when a new banking reform has made split payments nearly impossible?In Tunisia, where the average monthly salary hovers just around 1,000 dinars ($320), people have long relied on post-dated cheques to make purchases by paying in increments over months.Unlike many other countries where cheques are now rarely seen in the era of instant online payments, the culture of paying by cheque persists in Tunisia.But as part of banking reforms introduced in February the government seeks to reinforce the original role of cheques as a means of immediate payment. Cheques had effectively become a form of credit often tolerated by merchants.Unlike debit cards, credit cards are not widely available in the north African country.The new law officially aims at “curbing consumer debt” and “improving the business climate” in an economy whose real GDP growth, according to the International Monetary Fund, is projected at just 1.6 percent for 2025. But many feel it has also begun disrupting household budgets and small businesses.Ridha Chkoundali, a university professor and economist, said the new law “could be the last straw” for consumption and economic growth.He said the measure upsets Tunisians’ customary consumer behaviour, with mainly the middle class bearing its brunt.”Since it came out, I’ve been searching for ways to pay for a smartphone over several months without it eating away my salary,” said Meriah, 43. “But the new cheques don’t allow that.”Once a crucial pillar of Tunisia’s economic and social stability, the middle class made up around 60 percent of the population before the country’s 2011 revolution.Experts now estimate it has fallen by more than half to 25 percent.- ‘Got cash? Welcome’ -Leila, the owner of the smartphone shop in the Tunis-area district of Ariana, told AFP her sales have fallen by more than half, after she started taking cash only.”No one buys anything anymore,” said Leila, who didn’t give her last name. “We didn’t understand the law because it’s complicated and we don’t trust it. We decided not to accept cheques anymore.””Got cash? Welcome. If not, I’m sorry,” she summed up.Consumers are under even more pressure during the current Muslim holy fasting month of Ramadan.Tunisians tend to buy more during Ramadan, stocking up on food and sweets as families gather for collective meals before and after their daytime fasting.And as Eid al-Fitr — the holiday marking the end of Ramadan — approaches at the end of March, shopping for clothes and gifts rises.Many merchants had already grown reluctant to deal with cheques when the previous finance law ordered harsh prison sentences for cheque kiting — the fraudulent practice of issuing cheques with non-existent funds.Last April, judicial authorities said they were investigating more than 11,000 bad-cheque cases.This year’s reform is meant to reduce those cases. Based on the buyer’s income and assets, it has introduced a cap on the amount that cheques can be written for.It also allows the merchant to check if the payer has enough funds upon each transaction by scanning a QR code on their cheque.- ‘Another recession’ -Many feel the measure is intrusive, and the technological shift already adds a level of complexity.Badreddine Daboussi, who owns one of Tunis’s oldest bookstores told AFP the change has crippled his sales, adding to an already waning demand for books.”Before, customers paid with post-dated cheques, but now they can’t, and the new online tool is complicated and unreliable.””They just can’t buy books anymore,” he added, noting he had even considered closing up shop.Tunisia, a country of more than 12 million people, has long suffered sporadic shortages of basic items such as milk, sugar and flour.Its national debt has risen to around 80 percent of GDP and inflation is at six percent, according to official figures.Hamza Meddeb, a research fellow at the Malcolm H Kerr Carnegie Middle East Center in Beirut, wrote in October that President Kais Saied — who rejected IMF reforms — has engaged in “economic improvisation” with “heavy reliance on domestic debt”.Chkoundali, the other analyst, warned of “another recession”.”As consumption shrinks, the already little economic growth we have will also decline,” he said. Unemployment is already at 16 percent nationwide, according to official figures.Feeble consumption would help push that figure even higher, Chkoundali explained, with workers risking significant layoffs as profits dwindle.

Iran says won’t negotiate under ‘intimidation’ as Trump ramps up pressure

Iran said Monday it would not negotiate under “intimidation”, after US President Donald Trump sought to ratchet up pressure on Tehran by ending a sanctions waiver that had allowed Iraq to buy electricity from its Shiite neighbour.Iran’s mission to the United Nations had indicated Sunday that Tehran might be open to talks aimed at addressing US concerns about the potential militarisation of its nuclear programme — though not to ending the program completely.But on Monday, Iran’s top diplomat seemed to slam the door on such discussions, saying Tehran’s nuclear programme was and always will be entirely peaceful and so there was “no such thing as its ‘potential militarization'”.”We will NOT negotiate under pressure and intimidation. We will NOT even consider it, no matter what the subject may be,” foreign minister Abbas Araghchi said on social media platform X.Since returning to the White House in January, Trump has reinstated his policy of exerting “maximum pressure” against Iran, reimposing sweeping sanctions aimed at crushing its oil industry in particular.The US State Department said Sunday the decision not to renew Iraq’s sanctions waiver was made to “ensure we do not allow Iran any degree of economic or financial relief.”Iran supplies a third of Iraq’s gas and electricity, providing Tehran with substantial income.- ‘Never take place’ -On Sunday, the Iranian mission to the United Nations had sounded a more conciliatory note, suggested Tehran might be willing to discuss certain issues.”If the objective of negotiations is to address concerns vis-a-vis any potential militarization of Iran’s nuclear program, such discussions may be subject to consideration,” said a statement from the mission.”However, should the aim be the dismantlement of Iran’s peaceful nuclear program to claim that what (President Barack) Obama failed to achieve has now been accomplished, such negotiations will never take place,” it said.The waiver for Iraq was introduced in 2018, when Washington reimposed sanctions on Tehran after Trump abandoned a nuclear deal with Iran negotiated under Obama.A spokesman for the US embassy in Baghdad on Sunday urged Baghdad “to eliminate its dependence on Iranian sources of energy as soon as possible.””The President’s maximum pressure campaign is designed to end Iran’s nuclear threat, curtail its ballistic missile program, and stop it from supporting terrorist groups,” the spokesman said.The landmark 2015 deal that Obama helped negotiate between Tehran and major powers promised sanctions relief in return for Iran curbing its nuclear programme.Tehran, which denies seeking nuclear weapons, initially adhered to the nuclear deal after Trump pulled out of it, but then rolled back commitments.US officials estimate Iran would now need mere weeks to build a nuclear bomb if it chose to.- ‘All scenarios’ -Trump pulled out of the agreement over the objections of European allies, instead imposing US sanctions on any other country buying Iran’s oil. The waiver was extended to Iraq as a “key partner” of the United States.Iraq, despite having immense oil and gas reserves, remains dependent on such energy imports. But Baghdad said it had prepared “for all scenarios” regarding the waiver.The ending of the energy waiver is expected to worsen the power shortages that affect the daily lives of 46 million Iraqis.Gulf analyst Yesar Al-Maleki of the Middle East Economic Survey said Iraq will now face challenges in providing electricity, especially during summer.To alleviate the impact, Iraq has several options including increasing imports from Turkey.

Trump admin detains pro-Palestinian campus protest leader

Immigration officers have arrested a leader of the protests at Columbia University against Israel’s war in Gaza, authorities said Sunday, after US President Donald Trump vowed to deport foreign pro-Palestinian student demonstrators.Mahmoud Khalil, one of the most prominent faces of the university’s protest movement that erupted in response to Israel’s conduct of the war, was arrested on Sunday, the Department of Homeland Security (DHS) said on X.The agency said the action was taken “in support of President Trump’s executive orders prohibiting anti-Semitism, and in coordination with the Department of State.”The Student Workers of Columbia Union said in a statement that Khalil had been detained on Saturday, describing him as “a Palestinian recent Columbia graduate and lead negotiator for last spring’s Gaza solidarity encampment.”US campuses including Columbia’s in New York were rocked by student protests against Israel’s war in Gaza following the October 7, 2023 Hamas attack. The demonstrations ignited accusations of anti-Semitism.Protests, some of which turned violent and saw campus buildings occupied and lectures disrupted, pitted students protesting Israel’s conduct against pro-Israel campaigners, many of whom were Jewish. US Secretary of State Marco Rubio wrote on X that “we will be revoking the visas and/or green cards of Hamas supporters in America so they can be deported.”Khalil, who remains in immigration enforcement detention, held permanent residency at the time of his arrest prompting thousands of people to sign a petition calling for his release, the union statement added.”We are also aware of multiple reports of Immigration and Customs Enforcement agents accessing or attempting to access Columbia campus buildings on Friday and Saturday, including undergraduate dorms,” the union said.Columbia did not directly address Khalil’s arrest in response to inquiries, but in a statement said “there have been reports of ICE in the streets around campus.” “Columbia has and will continue to follow the law. Consistent with our longstanding practice and the practice of cities and institutions throughout the country, law enforcement must have a judicial warrant to enter non-public University areas, including University buildings,” Columbia said.In its post on X, the DHS said Khalil “led activities aligned to Hamas, a designated terrorist organization,” without further details.Trump railed against the student protest movement linked to the conflict in Gaza, and vowed to deport foreign students who had demonstrated.He also threatened to cut off federal funding for institutions that he said were not doing enough to combat anti-Semitism.His administration announced Friday it was cutting $400 million in federal grants to Columbia University, accusing it of failing to protect Jewish students from harassment.