Clinton Signs $100 Million Cash Transfer Agreement with Tunisia
May 17, 2012
Washington — Secretary of State Hillary Rodham Clinton signed a $100 million cash transfer agreement with Tunisia as part of the Obama administration’s efforts to support the country through its democratic transition since the January 2011 ouster of ruler Zine el-Abidine Ben Ali.
Speaking at the State Department May 17 with Tunisia’s ambassador to the United States, Mohamed Salah Tekaya, Clinton said the agreement is “an important step in our partnership,” and demonstrates the U.S. commitment to back up Tunisia’s democratic future “with action.”
The secretary announced the cash transfer in a March 29 press statement, saying that the funds would provide “short-term fiscal relief” to the Tunisian government.
“This will go directly to debt that Tunisia owes the World Bank and African Development Bank, allowing the government of Tunisia to instead use this money for its priority programs, accelerating economic growth and job creation,” Clinton said.
State Department spokeswoman Victoria Nuland told reporters May 17 that the Obama administration has been working hard with the U.S. Congress to get support for Tunisia “to help it bridge this period when it has a newly elected government, when it also has a lot of folks unemployed and it needs to show the benefit of a newly democratizing system.”
She said the United States is hopeful that the $100 million cash transfer “will be supportive of reform and democracy in Tunisia.”
LOAN GUARANTEE FOR TUNISIA ALSO EXPECTED
In April, the Obama administration also indicated its intent to provide a sovereign loan guarantee that could provide several hundred million dollars in support of Tunisia’s democratic transition and economic recovery, according to an April 20 statement from the Treasury Department.
In the statement, Treasury Secretary Tim Geithner recalled President Obama’s October 2011 commitment to support Tunisia’s transition and said, “This loan guarantee will be a pillar of that support, helping Tunisia achieve key development goals and advancing its economic transition.”
According to the Treasury Department, the guarantee, which is expected to be finalized in the coming weeks, will “significantly reduce the Tunisian government’s borrowing costs at a time when market access has become more expensive for many emerging market countries.”
According to an April 20 Reuters News Agency article, Chaker Soltani, a Tunisian finance ministry official, said in March that the U.S. loan guarantee will allow Tunisia to access international bond markets for the first time since 2007, and the U.S. guarantee could enable Tunisia to raise $400 million to $500 million at far lower interest rates than the country's financial risk profile would normally permit.