WBG/IMF Spring Meetings: Tunisia on agenda of global economic diplomacy
14/04/2023 18:12, Washington D.C/United States
(TAP Correspondent Khadija Bousselmi) - The concept of positive economic diplomacy dominated the remarks by International Monetary Fund (IMF) officials regarding the financial agreement with Tunisia, as there has been no reaction or public request from the country's authorities to reconsider its reform programme.

Despite the participation of a high-level Tunisian delegation, including the Governor of the Central Bank of Tunisia (BCT), Marouane Abassi, and the Minister of Economy and Planning, Samir Saied, little news was released about their participation.

This included Saied's talks with regional bank officials.

The IMF's 2023 Spring Meetings saw the adoption of new mechanisms related to sovereign debt and support for the most indebted countries, whose debts have worsened due to inflation, rising interest rates and disruptions to supply chains. This initiative should attract the attention of governments in need of financing to fill their budget gaps.

No diktat imposed on Tunisia

Speaking about the stalled agreement with Tunisia, Jihed Azour, Director of the IMF's Middle East and Central Asia Department, expressed a kind of economic and financial diplomacy that is very positive towards the country, despite the criticism directed at the Fund.

He said the Fund had not received any request from the Tunisian authorities to reconsider the home-grown reform, adding that the IMF would continue to support Tunisia.

He recalled that the reform programme proposed by Tunisia, which has been the subject of ongoing negotiations with the IMF for more than 12 months, takes account of the challenges and offers prospects for the future that require boosting investment, particularly in the private sector.

"We have been in constant dialogue with the authorities and have worked together to mobilise international support for Tunisia and its people, who deserve to be supported by achieving greater economic stability in order to solve the problem of inflation," he added.

"We are not alone in supporting Tunisia; international and multilateral institutions have promised to provide Tunisia with the necessary support in this area," he said.

He added that "the Fund has always supported Tunisia in difficult times, during COVID-19 and the Bardo events, and we will continue our support not only through our programmes, but also through technical assistance and permanent dialogue with the Tunisian authorities.

Despite the presence of the Minister of Economy and Planning at the spring meetings of the IMF and the World Bank, whose work began on 10 April, there was no reaction to Azour's statements reaffirming his institution's commitment to continuing its support for Tunisia.

The Ministry of Economy has merely published reports on the minister's most important meetings with the heads of the international financial institutions.

On this occasion, Saied met President of the European Bank for Reconstruction and Development, Odile Renaud-Basso, and the President of the Asian Infrastructure Investment Bank (AIIB), Jin Liqun.

These meetings focused on the development of financial cooperation between Tunisia and the international financial institutions and the main lines of the Tunisia 2035 strategic vision and the 2023-2025 development plan.

With regard to the participation of the Governor of the Central Bank of Tunisia (BCT), Marouane El Abassi, no information was provided on his presence at these meetings and the nature of the meetings he attended. This lack of clarity has weakened Tunisia's messages to the institutions and donors.

Signs of hope for the country

The World Bank plans to help the poorest countries by providing concessional lines of credit and additional grants to countries at risk of default.

The WB announced its action plans on April 12 following a meeting of creditor and debtor countries known as the Global Sovereign Debt Roundtable. It should be recalled that the debt of more than 70 low-income countries amounts to $326 billion.

The Roundtable is a forum led by the IMF, the World Bank and India, which will chair the Group of 20 in 2023, to resolve issues related to debt restructuring for countries facing financial difficulties.

These include the contentious issues contained in the G20's common framework for debt treatment, where China, the largest bilateral creditor to poor countries, is pushing for multilateral development banks to agree to reduce debt principal and contribute more to debt relief.

The United States defended its position on the grounds that any reduction in debt would weaken the ability of the MDBs to respond to the crisis and provide concessional loans.

As a result of the discussions, the meeting was unable to agree on a cut-off date of no more than three months from the date on which the IMF signs a staff-level agreement with debtor countries to provide financing guarantees.

Such guarantees are necessary for the IMF Executive Board to sign off on loans.

The World Bank has laid the groundwork for a reform that will strengthen its ability to lend to poor and developing countries and better help them cope with climate change and epidemics.

Malpass: Debt transparency must be ensured

World Bank Group President David Malpass told the Bank and IMF Spring Meetings in Washington on April 12 that this year's Spring Meetings come at a time when the global economy is facing a number of challenges, including Russia's invasion of Ukraine, rising interest rates, pressures on the banking sector, high and unsustainable debt, as well as rising oil prices and persistent inflation.

Malpass added that discussions with shareholders this week showed signs of progress on the need for greater debt transparency, increased development financing and more effective climate action, which are more in line with the World Bank Group's vision and message.

Translated by Samir Ben Romdhane

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