* World Bank to offer Tunisia budget support
* Mideast talks to be central at IMF, World Bank meets
* World Bank chief says Egypt has to change its ways
(Adds quotes, details on Egypt)
By Lesley Wroughton
WASHINGTON, April 12 (Reuters) - The World Bank is working with Tunisia on ${esc.dollar}500 million in budget support, which could leverage an additional ${esc.dollar}700 million from other donors, World Bank President Robert Zoellick announced on Tuesday.
Zoellick said budget funding will support reforms to increase transparency, improve services and create jobs.
"The reforms will focus on freedom of association; access to information; transparency in public procurement; beneficiary participation in service delivery; and retraining of unemployed workers," Zoellick told a conference call with reporters.
Unrest across the Middle East and North Africa will feature high in talks this week during semi-annual meetings of the World Bank and International Monetary Fund in Washington.
Zoellick said he would visit Tunisia in May to see how the World Bank can help the country, where mass protests toppled its leader in January after 23 years of autocratic rule.
Tunisian Finance Minister Jalloul Ayed said on April 1 the country expects little economic growth this year and needs ${esc.dollar}4 billion in foreign loans to help it recover from a sharp drop in tourism and foreign direct investment.
Unlike its neighbors Algeria and Libya, Tunisia does not have vast oil and gas reserves and relies heavily on tourism.
Zoellick said the World Bank had called for a meeting of multilateral banks at the IMF and World Bank meetings to discuss joint action to help the region.
"While economists often downplay short-term jobs, we need to be less allergic to devising ways to get people to work," he said, noting that the region needs to create 40 million new jobs over the next decade, the combined populations of Morocco and Jordan.
"We also need to help countries with effective safety-net programs, for those in need, but in ways that don't bust budgets,"
Turning to Egypt, Zoellick said the country can not go back to old ways of raising wages and increasing subsidies to cushion the population against rising fuel and food prices.
He said helping the poor needs to be done in a way that "makes economic sense" for the country.
"The traditional Egyptian approach ... will blow a hole in budgets and it won't be sustainable," Zoellick said.
The World Bank and IMF are in talks with Egypt's economic transition team on ways to support the country as it moves beyond its political turmoil.
Egypt's tourism minister, Mounir Fakhry Nour, told Reuters last week that the vital tourism industry, the country's main foreign currency earner, will suffer a 25 percent drop in revenue in 2011 and will need until September to get back on its feet.
The country's 18-day popular uprising forced out President Hosni Mubarak and saw much of Egypt's economy grind to a halt. (Reporting by Lesley Wroughton; Editing by Andrea Ricci)
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