• Tunisia Seeks IMF Protection from Financial Crisis

    By Bernard Yaros | Feb 5 2013 Share on Linkedin Share on Facebook Share on Twitter Share on Google Share on pinterest Print

    Tags: Amine Mati ,external shocks ,imf ,macroeconomy ,SBA ,

    IMF headquarters in Washington, DC

    Although Tunisia has the resources to cover its financial needs, it is seeking additional funds to protect its budget from external shocks that could threaten the government’s economic recovery program.

    An International Monetary Fund (IMF) mission visited Tunisia from January 15 to February 1 to discuss a Precautionary Stand-By Arrangement (SBA) of up to $1.78 billion in financial aid, which would safeguard the country's macroeconomic stability in the event of a crisis.

    The talks over the SBA are at an advanced stage, said Amine Mati, head of the IMF mission, in a press statement. The mission plans to continue working with Tunisian officials to finalize the SBA in March.

    In 2012, Tunisia's government recorded solid revenue performance and secured budget support loans from the European Union, the World Bank, and the African Development Bank. These sources as well as new ones identified for 2013 meet the budgetary requirements of the country's economic program to achieve regional development and reduce unemployment, Mati said.

    But he said the SBA is taking precautions due to exogenous shocks that could come from the global environment.

    The Eurozone crisis, for example, has hurt Tunisian exports to its main trading partners — Italy, Germany, and France — with the country's trade deficit increasing by 35%.

    During the visit, the mission met with all stakeholders in Tunisia's economic recovery, including members of the National Constituent Assembly, political parties, representatives from the private and financial sectors, trade unions, civil society, and Central Bank officials.

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    1. Although likely well know, Tunisia needs far more trading partners. Even what few goods are no produced here could easily be exported and bought by many other western countries. Of course, a strong and diversified service and manufacturing sector is needed the one resource are qualified people and Tunisia has that. There needs to be a cultural shift where young, educated men and women are far more motivated to create jobs.