By Alister Bull
WASHINGTON (Reuters) - President Barack Obama heralded Tunisia's progress toward democracy after a White House meeting with Prime Minister Beji Caid Sebsi on Friday, awarded for the country's "inspiration" of the Arab Spring.
"The United States has enormous stake in seeing success in Tunisia and the creation of greater opportunity and more business investment in Tunisia," Obama said after an Oval Office meeting the Tunisian leader.
Washington hopes Tunisia's progress toward democracy will set an example others will follow after faltering steps in that direction by Egypt, and Obama discussed an aid package worth $50 million in loan guarantees and enterprise seed capital.
"Given that Tunisia was the first country to undergo the transformation we know as the Arab Spring, and given it is now the first to have elections, we thought it was appropriate that Tunisia would be the first to visit the White House," he said.
Tunisia's popular uprising toppled its autocratic ruler Zein al-Abidine Ben Ali in January, sparking similar movements that have reshaped the political landscape of the Arab world.
Tunisia will hold elections on October 23. Some 11,000 candidates representing 110 parties will contest 218 seats in an assembly to rewrite the country's constitution.
"Tunisia has been an inspiration to all of us who believe that each individual, man and woman, has certain inalienable rights," Obama said. "We are deeply encouraged by the progress that has already been made in this short period of time."
Egyptians were among those most stirred by the Tunisian uprising to throw out their own leader. But months after long-time president and U.S. ally Hosni Mubarak was forced out, a military council still holds power amid accusations of human rights abuse, and has yet to set a date for elections.
"There is a sense in the administration that the United States has a larger stake in Tunisia being a success in the model it could set for other countries," said Jon Alterman, a senior fellow at the Center for Strategic and International Studies in Washington.
The White House said the U.S. Peace Corp will return to Tunisia in 2012, and the United States will provide $30 million in loan guarantees and $20 million to an enterprise fund for private sector growth, both subject to congressional approval.
In addition, Tunisia will be eligible for help from the U.S. Millennium Challenge Corporation foreign aid agency, and the two countries have already relaunched trade talks.
"The Tunisians seem to be doing pretty well. They are moving toward elections, it seems to be an orderly process, there are no major splits in the electorate that threaten to derail progress toward greater democracy," Alterman said.
(Reporting by Alister Bull; editing by)