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World Bank approves $300 million loan to poor families (Country Manager for Tunisia)

April 1, 2021

(TAP/Interview by Khemaies Ben Brik) - The World Bank Board of Executive Directors, on Wednesday evening, approved a loan of 300 million dollars (840 million dinars) to Tunisia to finance the social protection programme and urgently meet the needs of poor and low-income families that have been affected by the repercussions of the coronavirus. The loan aims to reduce poverty and social vulnerability and provide decent living conditions for disadvantaged groups.

This urgent support will provide circumstantial financial transfers to between 900 thousand and one million poor Tunisian families benefiting from permanent grants and white or yellow treatment cards, who have been hardly affected by the repercussions of the coronavirus, World Bank Country Manager for Tunisia Tony Verheijen said in an exclusive interview with TAP news agency.

Interview:

World Bank Group Vice President for the Middle East and North Africa, Ferid Belhaj announced a support for Tunisia's efforts to combat poverty within the social safety programme. What is this support? Who are the beneficiaries of it?

Years ago, the World Bank began providing support to the government to establish a social protection programme by creating a database on beneficiaries of social assistance, as well as supporting the Ministry of Social Affairs to create a legislative and institutional framework related to the social protection system and the reduction of social vulnerability including a wider segment of needy groups.

What happened recently is that we reached an agreement with the Tunisian government thanks to an initiative by the Vice President of the World Bank Group for the Middle East and North Africa and the Tunisian Ministry of Finance to embody the social safety programme and transfer temporary financial aid to poor and low-income families during these difficult circumstances.

During the first wave of the COVID-19 pandemic crisis, Tunisia redirected resources it obtained from the World Bank, the IMF and the European Union to make urgent transfers to poor families affected by the pandemic. Given that the health situation has not yet recovered since that time, we thought it would be important to continue transferring aid to these poor families this year.

Therefore, the support that we will provide to the government will make available additional resources to assist families in need and affected by the coronavirus crisis, since it has not included funds in the 2021 budget under “circumstantial assistance” to poor families affected by the pandemic.

It will support the state’s efforts to improve the living conditions of the disadvantaged and poor.

The World Bank, on Wednesday, agreed to provide support to Tunisia in the amount of 300 million dollars to finance the social protection programme and transfer circumstantial assistance to between 900 thousand and one million poor and families affected by the coronavirus pandemic, within the scope of the National Social Safety Programme approved by the Tunisian government in 2019.

This support is based on several main axes, including expanding social protection to include occasional assistance for the largest possible number of poor and needy families that were identified in the data base, besides allocating grants to protect human capital for poor families with children from 0-5 years in order to improve their access to health, educational and other services. This is not to mention the support allocated for the creation of the National Agency for Integration and Social Development.

Have you determined the practical arrangements for implementing this programme? What are the mechanisms that will enable poor families to receive financial aid?

One of the most prominent achievements of Tunisia in the first wave of the pandemic in 2020 is the use of digital mechanisms to accelerate the transfer of aid to those who need it and avoid the risk of crowding in front of post offices. The current idea is to renew last years’ experience and transfer that aid to those who deserve it, by using digital mechanisms without queuing up.

The database prepared by the Ministry of Social Affairs on the poor and low-income groups will enable channeling of circumstantial assistance to the actual beneficiaries, and the World Bank will pump funds for the government to further provide aid to families who objected to not having received and have proven that they live in fragility and poverty.

How do you assess unemployment rates, poverty and gender inequality in Tunisia 10 years after the revolution?

The poverty rate in Tunisia, as previously indicated by the Vice President of the World Bank Group for the Middle East Region, has reached more than 20 percent, which is unprecedented and has not been seen in Tunisia before.

This is partly due to the effects of the coronavirus pandemic, but in another aspect, it also resulted from the failure to implement the reforms needed to revive the Tunisian economy.

Consequently, this situation must be corrected as soon as possible by taking circumstantial and urgent measures to strengthen the social safety system to limit the effects of the pandemic on poor families, but also by creating more investment opportunities for entrepreneurs and initiating reforms to improve the business and investment climate.

How will the World Bank continue its support for Tunisia despite the absence of a new agreement with the International Monetary Fund?

We always stand by Tunisia, whatever the circumstances, but the absence of a bilateral agreement with the International Monetary Fund will impose some restrictions regarding some types of support that can be directed to Tunisia. For example, we cannot support the Tunisian state budget in the absence of a programme between Tunisia and the IMF, but this does not mean that we do anything.

Indeed, we can always continue implementing other programmes to provide funds to the government, including financing government spending at the level of the social protection programme. However, we cannot support the budget dedicated to covering expenses and salaries, for example.

Can you give us an idea of ​​the various current allocations of the World Bank to address the coronavirus?

Besides the $ 300 million support, last Friday we allocated $ 100 million in support to help Tunisia obtain vaccines against the coronavirus, speed up the vaccination campaign and strengthen the health system.

Throughout the year 2020 we have taken numerous actions to reduce the repercussions of the coronavirus by using some financial resources that were allocated to several programmes to finance the primary education programme, youth integration or irrigation in order to channel them towards helping Tunisians cope with the impact of the coronavirus and financing emergency purchases of medical equipment and tests.

Last year, we provided funds worth $20 million in addition to allocating resources worth $75 million in government budget support to intervene urgently to strengthen the health system and address the coronavirus.

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