US$175 Million Budget Support for Tunisia to Mitigate the Economic Impact of Covid-19
New Delhi: The World Bank Board of Executive Directors approved, on June 12, a budget support of US$175 Million for Tunisia under the Resilience and Recovery Emergency Development Policy Operation.
The operation, part of a coordinated and substantial international support package to help Tunisia respond to the COVID-19 crisis, includes contributions from the World Bank, KfW, Agence Française de Développement (AFD) Group, Japan International Cooperation Agency, and the African Development Bank; and it has been closely coordinated with macro-financial assistance provided by the European Union. The financing package of the joint operation will amount to US$600-700 million in 2020.
“This crisis is a serious challenge, but it could also be an opportunity for Tunisia to redefine its position in the global economy by improving conditions for investment and job creation in the private sector,” said Ferid Belhaj, World Bank Vice President for the Middle East and North Africa. “The countries that have implemented difficult reforms are driving economic growth and hastening recovery. If its leaders are decisive, Tunisia is very capable of making those reforms.”
This international support aims to help Tunisia to; i) protect vulnerable households and firms from the impact of the COVID-19 crisis, and; ii) implement critical economic reforms that will enable Tunisia to improve its post-crisis recovery potential and competitiveness as countries rethink global value and distribution chains.
“This is an unprecedented budget support, which required intense inter-donor coordination of several months carried out by our ministry,” said Mr. Selim Azzabi – Minister of Development, Investment, and International Cooperation. “The reforms included in this matrix represent an investment in the future as it aims at strengthening social cohesion between generations and between regions, and improves the business climate, particularly in terms of digitalization and interoperability, as well as the promotion of good governance of public enterprises.”
The World Bank’s contribution to the joint budget support engagement will focus on three inter-dependent pillars in the government’s reform program—namely to accelerate social safety net reforms and financial inclusion; to enable private sector recovery by modernizing port operations and leveraging private financing for renewable energy production; and to improve the transparency and performance of State-Owned Enterprises.