New US$250 Million Program for Tunisia to Promote Growth and Improved Economic Governance
April 29, 2014
WASHINGTON, April 29, 2014 – The World Bank today announced a US$250 million program for Tunisia in support of key economic and social reforms. The second Governance, Opportunity, and Jobs Development Policy Loan (GOJ DPL) focuses on laying the foundations for a competitive economy to create more and better jobs for the Tunisian people and provide financial support for macroeconomic stabilization.
Growth and better economic governance will be essential for addressing the challenges surrounding the country’s transition, as well as keeping up the momentum emerging from the new constitution. Following an intense concentration on emblematic governance reforms in the immediate aftermath of the 2011 revolution, the focus of World Bank policy support has broadened to include the reforms needed for stronger and more inclusive growth.
“This loan is an effort on the part of the World Bank to assist Tunisia in creating the conditions for the social and economic changes that Tunisians took to the streets for,” said Simon Gray, World Bank Country Director for the Maghreb. “If sustained, these reforms will not only address immediate concerns, but will also have a positive impact on growth and employment creation in the medium term.”
This—the second in a series of three DPLs—is focused on the urgent need for reforms to stimulate investment, most notably in the private sector, to address the post-revolutionary economic slowdown. Specifically, the targeted policy objectives are:
- Promoting private investment and establishing a more competitive environment
- Restructuring the financial sector
- Improving the quality and accountability of social sector services
- Increasing the accountability of public policies and finance
As part of the reform program supported by the DPL, the Tunisian government has made progress in opening up the telecommunications sector, which is seen as a driver of growth and one of the backbones for the recovery of the entire economy. Reforms in this sector will translate into more affordable, competitive, and accessible telecommunication services for Tunisian citizens and businesses alike.
The program has also supported important reforms in the governance of public banks to facilitate their restructuring and improve the stability of the banking sector, while making finance more accessible to Tunisian businesses. Reforms supported by the DPL will institutionalize citizen participation in the evaluation of public services across the country.
As a demonstration of the new Tunisia, the reform program benefited from broad stakeholder consultations with members of the Tunisian administration, civil society, and the private sector. The DPL series is also the product of support for Tunisia’s transition coordinated with other key development partners, such as the African Development Bank (AfDB) and the European Union (EU).
The first GOJ DPL—approved in November 2012—focused on the business environment by removing red tape, reducing the element of discretion, and increasing the degree of transparency in the investment process. It supported financial sector stability through strategic audits and regulations, and worked toward reforming key services including job-entry programs for young people, as well as the certification and accreditation process for higher education and health institutions and their staff. It also worked toward improving public access to information and greater transparency in budget preparation and reporting.
Along with budget support, the World Bank is financing ten projects in Tunisia, with a total of about US$435 million in commitments for water and sanitation, wastewater, financing for micro, small, and medium enterprises, higher education, and rural development in underdeveloped regions. Earlier this month, World Bank Group President Jim Yong Kim announced plans for a US$1.2 billion financial package for Tunisia in 2014, an amount four times more than the Bank’s contribution to Tunisia in the pre-revolution period, and double the amount provided since.
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