Washington, November 27, 2012 – The World Bank today approved a US$500 million loan to Tunisia that continues Bank support for key reforms as the government manages the country’s political transition. The Governance, Opportunity, and Jobs Development Policy Loan also helps pave the way for stronger economic growth and job creation over the medium term.
In June 2011, in the immediate aftermath of the revolution, the Bank approved a loan to Tunisia to support the then-transition government as it put in place critical changes such as access to information and liberalization of the internet to signal a sharp departure from the past. Today’s loan builds on those achievements and supports Tunisia’s further reform efforts.
"The agreement signed today sends a clear signal about the historic changes underway in Tunisia,” said Inger Andersen, Vice President for Middle East and North Africa at the World Bank. “The reforms which this financing supports will help Tunisia improve employment opportunities while ensuring better social services and more transparent government. These are the key demands of citizens across Tunisia.”
The new loan aims to accelerate Tunisia’s economic recovery by providing quick-disbursing assistance for reforms designed to encourage fair and sustained growth for every segment of society.
The reform program focuses on four important areas:
- improving the business environment by removing red tape, reducing discretion and increasing transparency for investments;
- strengthening financial sector stability through strategic audits and improved prudential regulations;
- reforming key social services, including better managing job-entry programs for young people, and certification and accreditation for higher education and health sector institutions and staff; and
- advancing transparency through improved public access to information and more transparent budget preparation and reporting.
As part its reform program, the government is simplifying regulations in partnership with the private sector. Reducing the red tape that bound Tunisia has been an important focus for World Bank support since the revolution. This is critical to reducing corruption and encouraging private sector investment, particularly for small and medium firms. For example a pilot program launched last year by the Ministry of Finance with input from the private sector, is working to eliminate 10 percent of tax and customs regulations and to significantly streamline a further 85 percent. Today’s loan ensures continued World Bank work with the Tunisian government to extend this regulatory reform to an additional nine ministries which deal with economic activities.
Another example of reforms launched with the support of World Bank development policy lending is in the telecommunication sector. Government moves to open the international telecommunications market to competition will shortly translate into lower prices for international calls to and from Tunisia. This is ongoing work in which the World Bank will remain engaged to ensure that this sector continues to improve its performance.
Access to information reform, too, is ongoing. To ensure better, more transparent and accountable governance, the World Bank’s first loan supported an Access to Information Law, one of the first of its kind in the region. As a result, the Ministry of Finance now publishes monthly data on budget execution, and is preparing an interactive web platform to open access to data on public finances. The backlog of annual reports of the Supreme Audit Institution was published online in June 2011 and as of June 2012 the Statistical Office website has been enabling the downloading of micro data from recent demographic surveys allowing for independent analysis. Today’s new loan supports government measures to implement access to information more effectively across the administration.
“The Tunisian people have clearly expressed their demand for more transparent and responsive government,” said Simon Gray, World Bank Country Director for the Maghreb. “The Government of Tunisia has adopted a number of measures to respond to these aspirations. The continuing partnership between the government and the World Bank will help expand these reforms so that they translate into real progress towards more transparent governance and more inclusive growth.”
While developing today’s development policy loan, the World Bank benefited from broad stakeholder consultations with the administration, civil society and the private sector. This work is part of the World Bank’s continued assistance to Tunisia’s transition with its development partners, including the African Development Bank (AfDB) and the European Union (EU). These partners bring a further US$700 million as part of a wider lending package designed to support Tunisia’s important transition.
The World Bank strategy for Tunisia, which guides this newest loan, was revisited in September. It allows for flexible measures to support Tunisia’s political and economic transition by increasing the country’s appeal to investors, while ensuring a more equitable distribution of jobs and services across the country, most especially in neglected rural areas which lag behind Tunisia’s urban centers.
