The World Bank has uncovered new evidence of large-scale corruption and tax evasion by firms owned by the family of former Tunisian president Zine El Abidine Ben Ali during his dictatorship, and has also warned that graft has intensified since the revolution that ousted him four years ago.
A new research paper by World Bank economists released on Thursday shows that companies owned by relatives and close allies of Ben Ali defrauded the state of €890 million to €2.3 billion over seven years by avoiding import tariffs. Researchers investigated the dealings of 206 companies between 2002 and 2009.
The findings represent one example of the cronyism that typified Mr Ben Ali's 23 years in power and that was one of the main drivers behind the uprising that overthrew him in 2011. Protesters vented their anger against Mr Ben Ali's family, and in particular his wife Leila Trabelsi, a former hairdresser, and her businessmen brothers who had rapidly amassed great wealth.
The scale of the corruption remains a concern not only for the money it has cost the Tunisian state but also for the continuing damage that an unreformed and inequitable system does to the economy and to business in general. Hundreds of the family’s companies that were confiscated after the revolution are now publicly traded.
The family had amassed assets of $13 billion, according to officials in charge of the confiscation. Tunisia’s anti-corruption commissions, who have examined reams of documents impounded in the presidential palace, concluded that the entire system of governance under Mr Ben Ali was corrupt and referred nearly 400 cases to the courts.
Samir Annabi, who has led the National Anti-Corruption Authority for the past three years, said he was shocked by the extent of the graft and the legal manner in which Mr Ben Ali had instituted it. "I knew there was corruption, but not how it was in every field and every part of the country," he said in a recent interview in Tunis. "The system itself was corrupt, the entire way of governing the country."
The World Bank had to review its own reporting on Tunisia since for years its appraisals of the country's economic performance had been upbeat. Bank officials attribute their misreading of the level of the corruption to a lack of information available under the authoritarian government.
The World Bank detailed how the system worked in a first report on corruption under Mr Ben Ali last year titled All in the Family. Firms owned by Mr Ben Ali and his family dominated the telecommunications and air transportation industries, as well as real estate and other sectors of transportation, and were extremely lucrative, the report found.
By controlling the regulatory system of licensing and investment, the presidential family maintained a virtual monopoly in the sectors they chose, preventing competitors from entering the market and outperforming others in every aspect: employment, market share, profits and growth. Of the firms owned by the family that were confiscated, 220 accounted for 21 per cent of all net private sector profits in Tunisia, the report said.
(New York Times)