31 January 2014

Tunisia: IMF Releases Tunisia Loan

Najjar in Tunis — The International Monetary Fund (IMF) just released the second tranche of a 1.25 billion euro loan approved for Tunisia in 2013.

The IMF had delayed delivery of the promised money because of Tunisia's political crisis. This week, the global financial institution praised the country's progress.

Following the swearing in of the new Mehdi Jomaa government, the IMF on Wednesday (January 29th) said it would disburse another 374 million euros.

After Tunisia received the first tranche of funds -111 million euros - last year, the IMF said that the government needed to comply with several economic reforms.

The IMF called on Tunisia to rehabilitate public banks, reform its subsidy system, complete a new investment law, and establish social measures for limited-income categories.

Finance Minister Hakim Ben Hammouda on Wednesday confirmed to Tunisian media the "importance of speeding up development projects in internal areas and good preparation for the next events, especially the general population census".

He also stressed "the need to promote co-operation between Tunisia and international and regional financial institutions and pay attention to investment as the main engine for economic growth, creation of wealth and employment opportunities".

The Tunisia Central Bank board on Wednesday also expressed "relief over the political breakthrough due to tangible progress made in the transition, especially through the approval of the constitution and the vote of confidence given to the new government by the National Constituent Assembly (ANC)".

"This represents positive indications and sends messages of reassurance to economic actors both inside and outside the country, as it helps restore confidence and pave the way for improving the atmosphere of investment and restoring the pace of economic activities and growth," it noted.

For his part, Sami Ramedi, president of the Tunisian Association for Financial Transparency, told Magharebia, "The value of Tunisia's external debt has increased to 50% of the country's gross domestic product within two years as compared to the end of 2010 and beginning of 2011 when it didn't exceed 40%."

"The fear now is that the country may resort to selling its national wealth, whether land or institutions, to get rid of its debt," he added.

He lamented, "Tunisia is now taking loans from European countries to live and eat with, not to execute development projects or create jobs."

For his part, former Deputy Finance Minister Slim Besbes told Mosaique FM that the IMF loan would "have a positive impact and give the green light for co-operation with international financial institutions".

"This will encourage the World Bank, EU and others to meet their promises to Tunisia," he said. Meanwhile, reactions varied on the Tunisian street over financial assistance provided by world banks.

"The formation of a new government and approval of the new constitution have had a positive impact that was reflected on Tunisia's relations with the outside world," Ala Mouradi, 36, told Magharebia. "The IMF has given Tunisia a loan that will enable it overcome its severe economic crisis."

However, "Reliance on such loans will make Tunisia depend on some powerful countries," commented Sana Toumi.

"We need to change mentalities and encourage young people to give more and work to increase production rather than depend on European and other countries," the 33-year-old added.


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