U.S. to provide $100 million debt aid to Tunisia


The United States said Thursday it would grant $100 million to Tunisia to pay its debts, hoping to let the government focus on the economy and show a success in the birthplace of the Arab Spring.

Secretary of State Hillary Clinton said the United States was also negotiating a separate package in which Washington would offer loan guarantees to raise hundreds of millions of dollars in capital for Tunisia.

Clinton, who spoke by telephone Wednesday with Prime Minister Hamadi Jebali, said the aid would let Tunisia pare down debts to the World Bank and African Development Bank left over from dictator Zine El Abidine Ben Ali’s 23-year regime.

The $100 million U.S. cash transfer will allow Tunisia “to instead use this money for its priority programs, accelerating economic growth and job creation,” Clinton said in a statement.

“As Tunisia progresses into the next phase of its historic democratic transition, the United States is working to help accelerate economic growth that benefits all, ensure that democracy delivers for the Tunisian people, and to help Tunisian businesses − large and small − become engines of job creation,” Clinton said.

“We call on other partners in the international community to join us in supporting Tunisia and ensuring economic opportunities for more Tunisian people,” she said.

The grant still needs approval from Congress. Many lawmakers, particularly from the Republican Party which controls the House of Representatives, are skeptical of foreign aid and have voiced alarm over Islamism in the Arab world.

The United States has also pledged to boost investment in Tunisia. Assistant U.S. Trade Representative Daniel Mullaney, after a visit to Tunis, said Thursday he was convinced the country sought to “usher in a new era of free markets and broad-base economic opportunity.”

Tunisians, inspired by a fruit vendor who set himself on fire after humiliation by authorities, took to the streets in a mass uprising that ousted Ben Ali in January 2011.

The movement spawned the so-called Arab Spring that has contributed to the ouster of authoritarian leaders in Egypt, Libya and Yemen and helped fuel a bloody one-year insurgency against Syrian President Bashar al-Assad.

President Barack Obama’s administration has put a top priority on building relations with the new democracies in the Arab world.

Despite past U.S. support for Ben Ali, the United States has maintained friendly relations with Tunisia’s new government and welcomed its hosting of a major international meeting on the Syrian crisis in February.

Before the latest announcement, the United States said it has provided assistance worth $190 million for post-revolution Tunisia, focusing largely on technical assistance to jumpstart its economy.

Despite assistance from the United States, European Union and other key partners, Tunisia has been appealing for more assistance to shore up its economy.

Tunisia is saddled with more than $25 billion in public and private external debt, according to U.S. data. According to the World Bank, Tunisia’s external debts were equal to 51.1 percent of its economy in 2010, although the figure improved from previous years.

Tourism − a key money-earner for the Mediterranean nation − and foreign investment have plunged since last year’s revolution.

The Tunisian government is hoping for 3.5 percent growth this year after its economy contracted 1.8 percent in 2011.