A Spotlight on the World Bank Group in Tunisia

Since the revolution, the World Bank Group has adjusted its overall strategy to support the goals of the transition. The bulk of this support has been in the form of a series of Development Policy Loans (DPLs), totaling $1,250 million – now fully disbursed. The DPLs were designed to provide budget support and allow the government to focus on key reforms. The Bank reacted rapidly post-revolution and approved a US$500 million DPL in June 2011 (topped up by US$800 million from other partners such as the Africa Development Bank, the European Union and the French Development Agency). Two further DPLs s, one for $500 million and another one for $250 million were approved respectively in fiscal years 2013 and 2014. The latest, for $500 million is in an advanced stage of preparation. This series of DPLS has focused on reforms to improve  public sector governance, strengthen the banking sector, increase transparency and access to information, promote  competition in the private sector and introduce more flexibility into the labor market.

The World Bank also finances 22 investment and technical assistance operations in Tunisia (10 loans for about $1 billion – disbursed at 42% - and 12 grants for $51 million). The loans support access to finance for Micro, Small and Medium Enterprises (MSME), infrastructure (energy, water and sanitation) and social services (education), and community driven development operations. Water and sanitation is the largest sector (30%), followed by access to finance, (20%) and local Governance (20%) (see chart on the right). Recently approved projects include a Competitiveness and Export Development Project ($51 million); a groundbreaking  Urban Development and Local Governance program for results ($300 million), additional funds for a project supporting access to small and medium enterprises ($100 million) and additional funds for a project financing Water Treatment Facilities (SONEDE - $20 million). The local governance program for results is seen as a flag-ship operation to support the emerging decentralization agenda. t The project is designed to boost the capacities of local governments to take charge of their budgets, and to encourage  more responsiveness to local citizens by linking the disbursement of project funds to improved performance. . The other 12 smaller grants facilitate a variety of development projects. They encourage innovation (such as protecting precious oases ecosystems and the related livelihoods), co-operation between government and civil society organizations and to increase the participation of marginalized groups in projects (such as emergency support for youth).

Along with financial support, The World Bank also provides the full range of its knowledge and expertise in the form of extensive analytical work on Tunisia. A list of top ten recently completed analytical studies is available on this link. The Unfinished Revolution: Bringing opportunity, good jobs and greater wealth to all Tunisians, provides the first comprehensive analysis of the Tunisian economy since the revolution, along with s the analytical underpinning for most of the reform programs supported by the series of DPLs  described above.

Finally, another significant aspect of World Bank engagement with Tunisia is   technical assistance. This type of support is best exemplified by the long-term partnership with SONEDE – the Tunisian Water Utility (see feature story Water: Tunisia’s other development challenge). In order to facilitate the financing of the remainder of SONEDE’s investment program, a donors’ conference was held by the utility and the Government of Tunisia at the World Bank Group Offices in Marseilles a year ago. This event brought together 50 participants, including representatives from 10 lending institutions and a Tunisian delegation of 15 persons. The conference was highly successful: the Tunisian authorities were able to obtain funding commitment for 100% of all remaining investments (total US$ 632 million) from the various lenders present.

The International Finance Corporation (IFC) has remained strongly committed to supporting the private sector in Tunisia. Since 2011, IFC ramped up its engagement in Tunisia with a strategy of restoring investor confidence and facilitating private sector led growth and job creation. Six new investments amounting to US$105 million were committed since January 2011, and current IFC’s portfolio is about US$212 million. In addition, IFC has mobilized about US$156 million from other investors.  In FY14, IFC invested in the country through regional investment funds that target high growth SMEs in Tunisia, Morocco, and Algeria -- supporting much needed regional integration. The portfolio is diverse, with investments in transportation, banking, microfinance, oil and gas and health care. IFC also stepped up its advisory support in Tunisia and has been working closely with the World Bank, especially in the area of investment climate reforms and access to finance for MSMEs. IFC has rolled out the Education for Employment Initiative for Arab Youth program (E4E), an investment and advisory program which aims at improving youth employability. Currently, E4E includes partnerships with public and private universities, business associations, and training institutes to train students in “soft-skills.”

With the political transition process in Tunisia coming to an end, the World Bank Group is thinking about its next steps and how best to adapt its strategy to meet the changing priorities in Tunisia’s  new phase. In 2015, a series of consultations with a diversified group of stakeholders will be launched in preparation for the new partnership framework, which will guide the Bank Group’s engagement with Tunisia during the 2016-2020 period.