The World Bank is planning to lend Tunisia up to $5bn over a five-year period to support the private sector, particularly in the southern and western parts of the country.

According to World Bank Group President Jim Yong Kim, the World Bank is currently working with the Tunisian government on a new partnership strategy.

Kim called for a sharper focus on creating jobs for disenfranchised youth and spurring economic growth in the country’s lagging regions.

“Tunisia’s economy has suffered a significant setback caused by the terrorist attacks. But its strong institutions, historic track record of growth and a vibrant civil society give us confidence that Tunisia can bounce back,” said Kim, who is visiting Tunisia for the second time in his presidency.

“But first the government needs to implement its reforms. We are here to help; and to support the country’s leadership in tackling economic challenges, while creating job opportunities especially for young people,” he added.

Tunisia’s economy has suffered in recent months because of insecurity and a significant drop in tourism.
In 2015, GDP per capita fell by 10% compared to 2014, with tourist arrivals and foreign investment shrinking by one-third.

At the same time, two out of five youth under the age of 30 are out of work, while less than one in four women participate in the labor market.

“Tunisia is widely recognized around the world as a beacon of hope. But it’s at a crossroads. It needs to strengthen the social contract with its people, improve the delivery of public services and focus on achieving economic growth and social justice,” said Kim.

“Growth and employment generation require a dynamic private sector; that is why improving the business environment and reforming the banking system are so important. And we know that investing in people through better quality education and health services is the best path to eliminating poverty and achieving shared growth,” he added.

In addition, the World Bank Group has partnered with the UN and Islamic Development Bank to rally the international community around the goal of promoting peace and stability in Tunisia and the Middle East and North Africa (MENA) region.

The New Financing Initiative to Support the MENA Region aims to raise a greater volume of funds needed for post-conflict reconstruction and economic recovery for MENA countries.

Funding from the new initiative, combined with current programs, is expected to total about $20bn over the coming five years.