Islamists, liberals face off outside Tunisian assembly

Thousands of Islamist supporters descended on central Tunis Saturday to confront liberal demonstrators rallying against extremism as lawmakers draft a new constitution for Tunisia. Separated by barriers and police, they shouted insults at each other outside the Bardo Palace where the constitution is being drawn up after a vote that saw the moderate Islamist Ennahda party win most seats on the drafting body. The Islamists waved Ennahda flags but also the black banners of the hardline Salafist Hizb Tahrir, which has not been legalised in the north African country. Ennahda spokesman Noureddine Bhiri, whose party denied being behind the Islamist rally, went to try to calm the situation as police reinforcements and armoured vehicles were brought in to block the entrance to the palace. The constituent assembly also issued a statement appealing for calm and support as it charts the country's future and sets the pace for the Arab Spring, a year after the birth of the revolution that brought about regime change. "Tunisia is going through a very sensitive phase where the priority is the establishment of a democratic regime and of a fair economic system. And this requires us to refrain from anything that could stir tensions and instability," the statement said. Hundreds of students, teachers, unemployed miners and other protesters began gathering Wednesday at the Bardo Palace with various demands. The protest was partly a response to ongoing demonstrations at a university outside the capital, where Islamists disrupted courses demanding a stop to mixed-sex classes and for female students to wear the full-face veil, or niqab. A spokeswoman for the liberal protesters, Ines Ben Othman, said Islamists physically attacked them overnight. Ennahda dominates the 217-member assembly elected in the country's first democratic polls on October 23. Long-time Tunisian leader Zine el Abidine Ben Ali and his staunchly secular regime were ousted in a popular uprising in January and the country has no government yet, while the economic situation is worsening. Central bank governor Mustapha Kamel Nabli was quoted by the TAP news agency Saturday as saying that growth this year will be zero while unemployment will be up to 18 percent. The vital tourist sector has been hard hit by the revolution, with foreign visitors preferring to go elsewhere, while the phosphate industry has seen production plummet because of a series of strikes. In addition some 100,000 Tunisians working in neighbouring Libya fled back home during the upheaval that overthrew Moamer Kadhafi's regime and are left without jobs. The central bank Friday demanded that its independence be guaranteed in the new onstitution, as a draft law threatened to place it under government control. Ennahda, with 89 seats in the constituent assembly, is accused by some, including prospective coalition partners, of seeking to concentrate all powers in the hands of the new prime minister, the party's number two Hamadi Jebali. The assembly is due to vote in the next few days on a power-sharing deal which would make left-winger Moncef Marzouki the country's next president. Some Tunisians were increasingly unnerved by the country institutional limbo, with talks for a new executive dragging on and the former interim administration led by Beji Caid Essebsi having already resigned. "It's urgent, we can't wait any longer. There's a climate of hesitation and indecisiveness, nobody is making decisions, it's crippling the economy," said Hichem Elloumi, a representative of the country's employers association. India central bank says will defend ailing rupee India's central bank said on Saturday it would act to prevent a "downward spiral of the rupee" which has been hit by fears about the global economy. The rupee has been stumbling to record lows against the dollar as foreign investors abandon Indian and other emerging market currencies in search of safe havens. It plunged to a record low of 52.73 against the dollar last month on fears about the eurozone debt crisis and the world economy as well as falling Indian shares which are faring the worst among their regional peers. "In volatile market conditions that we see today, RBI (Reserve Bank of India) intervention to keep markets orderly and prevent a downward spiral of rupee is justified," said central bank deputy governor Subir Gokarn. "If we do see the short-term risk of a downward rupee spiral escalating we will not hesitate to use all available instruments," Gokarn said in a video message to a meeting of the Confederation of Indian Industry. He did not mention a desirable target level for the rupee which has fallen around 14 percent against the dollar since the start of 2011 and is the worst performing of Asia's 10 most-traded currencies. The rupee's decline has fuelled India's inflationary woes, making imported goods such as foreign crude oil, on which the country relies, more costly. India's annual inflation is running at near double-digits and is the highest among major global economies. Unlike fellow emerging market giant China, India allows its currency to float freely. Gokarn's comments contrasted with remarks he made earlier when he expressed hesitation about central bank intervention to support the rupee. Gokarn said last month it would be a "risky strategy" if the bank were to "try and resist or try and do something for which we do not have a capacity". Diminishing India's appeal to foreign investors and piling pressure on the rupee have been a slew of government corruption scandals, accusations of "policy paralysis" and a deteriorating fiscal situation.