Tunisian PM visits White House, secures $500 million loan guarantee
04/04/2014 5:03 PM
04/04/2014 5:03 PM
Tunisian Prime Minister Mehdi Jomaa traveled to the U.S. this week seeking an economic boost to help stabilize his country’s fledgling democracy.
On Friday, during Jomaa’s first visit to the White House, he got it: President Barack Obama announced a new $500 million loan guarantee for Tunisia.
The U.S. previously provided a $485 million loan guarantee to the country in 2012.
America has a huge investment in making sure that Tunisia’s experiment is successful, Obama said.
“And we want nothing more than Tunisians to determine their own destiny, for the economic reforms to take place to allow Tunisia to be not just self-sufficient but thriving in the world economy,” he said.
Jomaa expressed pride in Tunisia’s progressive new constitution but acknowledged that Tunisians face serious obstacles on the path to reform.
Among the challenges are 16 percent unemployment and high inflation. The loan guarantee will help Tunisia borrow money at favorable rates to plug an estimated $2-$3 billion hole in its annual budget.
“Now we need to focus on the future,” Jomaa said.
Jomaa’s Oval Office appearance with Obama highlighted Tunisia’s prominent role as the birthplace of the Arab Spring, but also served as a reminder that the uprisings have failed to live up to their initial promise.
Three years after Tunisian fruit vendor Mohamed Bouazizi sparked the Arab Spring by setting himself on fire, Egypt’s government is under military control, Syria is embroiled in a bloody Civil War, and Libya is plagued by violence, while in Bahrain, the regime’s crackdown on protestors has exacerbated sectarian tensions.
By comparison, Tunisia’s appears to be a rare_if tenuous_success story, with a caretaker government made up of technocrats, a newly ratified constitution that guarantees religious freedom, and elections expected later this year.
The loan guarantee announced Friday is critical for Tunisia, said Sarah Chayes, a senior associate in the Democracy and Rule of Law Program and the South Asia Program at the Carnegie Endowment.
“This isn’t a country that wants to live on development aid and assistance money,” Chayes said. “It’s a country that really wants to be part of the world and that means private investment and trade.”
But Chayes said the U.S. could do more to support Tunisia.
A free trade agreement, for example, would make it easier for Tunisia to receive outside investment, Chayes said.
“Tunisia is one of the countries where it would really make sense to do it, just because it would be reinforcing a really remarkable process,” she said.
Jomaa also spoke Friday to Treasury Secretary Jacob Lew, who said the U.S. is encouraged by the progress the Tunisian government is making with its political transition and economic reforms.
“Economic stability is key to political stability,” Lew said in a statement. “This loan guarantee will complement the efforts of the Tunisian government to provide economic opportunities for the people of Tunisia, and will be important to the region."
As Jomaa pointed out at the White House on Friday, Tunisia and the U.S. have a longstanding history.
“In the 18th century, Tunisia was one of the first countries to recognize the United States’ independence, and conversely, the United States was one of the first countries to recognize Tunisia’s independence,” the prime minister told Obama.
“So I want to thank you for allowing us to set this road map for the future,” he said.
During his four-day official visit to the U.S., Jomaa will meet with members of Congress and the heads of the International Monetary Fund and the World Bank, as well as American investors.