WASHINGTON (Reuters) - The World Bank on Tuesday approved a $500 million (312.1 million pounds) loan to Tunisia to help it recover from the Arab Spring uprising that toppled the former regime, with another $700 million loan coming from other donors.
The loan, the World Bank’s second since the revolution, aims to support Tunisia’s economic recovery by providing funds to improve the business and financial sectors and reform social services, which are vital for reducing inequality.
The World Bank said the European Union and the African Development Bank are giving a further $700 million to support Tunisia’s transition.
The loans show global development lenders support the direction of Tunisia’s reforms, which aim to satisfy citizens’ demands for jobs, social services and transparent government.
“The agreement signed today sends a clear signal about the historic changes under way in Tunisia,” said Inger Andersen, the World Bank’s vice president for Middle East and North Africa.
Part of the reform program will involve eliminating 10 percent of tax and customs regulations in some government ministries, increasing competition in the telecommunication sector, and expanding the new Access to Information Law.
Tunisia was the birthplace of the Arab Spring uprisings last year across the Middle East and North Africa, which toppled its ruler after an almost 23-year reign. Since then, the country has struggled to regain economic stability while dealing with political transition and a slowing global economy.
The government has also committed to helping the poor, as well as thousands of former political prisoners and others who suffered under the former president.
Tunisia’s government has said it will need about 7 billion dinars (2.7 billion pounds) of loans and aid next year as it proceeds with a costly plan to compensate former political prisoners freed by the 2011 revolution.
In August, Tunisia announced that it expected the World Bank and the African Development Bank to each lend it $500 million to support its budget.
The World Bank previously approved a loan for the country in June 2011.
Reporting by Anna Yukhananov; Editing by James Dalgleish and Jan Paschal