Overview of U.S. Economic Assistance to Tunisia
As Tunisia’s brave citizens chart a new democratic future, they continue to set an example for the region and the world. The United States remains committed to working with the government and people of Tunisia as they pursue a more peaceful, prosperous and democratic future. - Hillary Rodham Clinton, October 24, 2011
Tunisia has inspired the world with its peaceful, steadfast march toward a more democratic, prosperous society. As Tunisia continues in this critical phase of its history, the United States remains a committed partner in working with the Tunisian government, private sector, and civil society to develop institutions of governance, and in laying the economic foundations for Tunisia to thrive as a 21st century democracy.
Since the Revolution, the United States has committed approximately $190 million in total assistance to support Tunisia’s transition, focusing heavily on technical and financial assistance to Tunisia’s economy and private sector. In addition, the U.S. Overseas Private Investment Corporation is working to invest roughly $150 million in Tunisia. We seek to ensure all of our aid is economically and socially inclusive, with elements specifically targeting the interior parts of the country. Specifically, U.S. assistance responds to Tunisian requests to promote fiscal stabilization; expand economic and employment opportunities throughout the country, particularly for youth; and encourage investment and growth-minded reforms. Highlights of our ongoing work in these areas include:
Promoting Fiscal Stabilization
- Sovereign Loan Guarantee – The United States will extend a guarantee for international loans or bonds that the Tunisian government will issue to raise funds to support its stabilization and economic reform plans. The U.S. Congress has appropriated $30 million for this purpose, which can support several hundred million dollars in new financing for the Tunisian government. Technical discussions are continuing with the goal of finalizing a loan guarantee agreement in the next few months.
Expanding Economic and Employment Opportunities
- Middle East and North Africa (MENA) Incentive Fund – The U.S. is requesting from Congress a $770 million fund to support Tunisia and other transitioning MENA states in their plans to spur economic growth and inward investment, as well as to expand private-sector job and skills training opportunities, and build effective, democratic governance.
- Information Communications Technology Sector Development - With an initial $ 8 million, this program will position Tunisia’s ICT sector as a catalyst for private-sector growth and job creation. The program will support a range of ICT enterprises from export-oriented medium enterprises to small firms and start-ups. As envisioned, the project will train and support thousands of Tunisians across several skill sets and job-placement initiatives.
- Return of the Peace Corps - Peace Corps Volunteers will return to Tunisia where they will provide English language training and youth skills development to help to help prepare Tunisian students and professionals for future employment, build local capacity, and foster citizenship awareness at the grassroots level.
- Eight New Tunisian-American University Linkages - Building on the success of five ongoing university linkages facilitated by grants from the U.S. Embassy in Tunis, the U.S. plans establish eight additional linkages between U.S. and Tunisian higher education institutions in 2012. Two of these linkages will focus on business and entrepreneurship skills critical to building a globally competitive Tunisian economy, and will include a new joint dual-degree program between the Tunisian Business School and a U.S. partner institution, as well as a new tourism management curriculum at the Higher Institute of Djerba.
- Youth Entrepreneurship and Employability - The United States is providing assistance to more than 4,500 Tunisian youth in market-relevant skills training, job placement, and access to start-up business resources. For example, the Education for Employment Foundation (EFE)— a network of locally-run not-for-profit organizations that equips the region’s youth with skills and tools to enter the work force—will place hundreds of their trainees in permanent jobs while providing employability, professional skills, and entrepreneurship training to an additional 500 university students.
- Women’s Entrepreneurship Program – The United States continues to work with women entrepreneurs, providing them with the resources to enable them to contribute to Tunisia’s economic development and to the direction of the country’s overall development. The U.S. will partner with Microsoft Corporation, other technology companies, and eight local Tunisian women’s organizations to provide technological, social media, entrepreneurship and leadership training to 1,200 women entrepreneurs to help develop their businesses.
Encouraging Investment and Growth-Minded Reforms
- OPIC Franchise Facility, Clean Energy & SME Financing – A $30 million franchising facility, financed through the Overseas Private Investment Corporation (OPIC), will provide working capital to Tunisian franchisees interested in working with American, European, and Tunisian franchisors. Ultimately these franchises will create an estimated 10,000 local jobs for Tunisians. OPIC is also providing U.S. companies with incentives to invest in Tunisia’s renewable energy sector, notably wind and solar. In addition, OPIC recently approved $52.5 million in financing to Tunis-based Tuninvest for their Maghreb Private Equity III fund.
- Tunisian-American Enterprise Fund – In February 2012, the United States secured formal authority from the U.S. Congress to establish the Tunisian-American Enterprise Fund with an initial capitalization of $20 million. The fund help foster stronger investment ties between Tunisian and American United States, will leverage other investors, and will help Tunisians launch the small and medium enterprises that will be engines of long term growth.
- Millennium Challenge Corporation (MCC) Threshold Program – In February 2012, the United States and Tunisia formally launched the first phase of Tunisia’s MCC Threshold Program, in which both sides will jointly identify Tunisia’s primary constraints to economic growth. This analysis will inform the design of the $20-30 million program, which will target policy and/or institutional reforms to increase economic growth. MCC expects to complete the analysis by July and have the Threshold Program ready to submit for Board approval by December 2012.