President of Tunisia Flees Country, Just Like All the Illegal Capital

Forthcoming Report Finds North African Nation Loses $US1.16 Billion Annually in Illicit Financial Outflows

Yiannis G./Flickr*

President Zine el-Abdine Ben Ali of Tunisia fled his country on Friday, and Prime Minister Mohammed Ghannouchi has announced that he is now in charge. Tunisia is a country known for its oppressive government rule and, according to a BBC analysis, “human rights groups say the authorities tolerate no dissent, harassing government critics and rights activists.”

Unrest among Tunisians has lead to deadly riots this month over unemployment and poor governance. According to the Associated Press at least 23 people have died, and the opposition says that figures could be much more than that.

Anti-Government protests have increased in the wake of a college-educated street vendor who burned himself to death in protest against corrupt police officers who confiscated the produce he was trying to sell.

The state of public affairs in Tunisia is stretched thin and had left little hope for a reduction in income disparity across the country. The fleeing President, Ben Ali, was elected in November 1987 and has been serving his fifth consecutive five-year term as president.

According to a 2010 IMF staff report on the country, much of the economy is responding strongly to the financial crisis and has been experiencing accelerated growth in 2009 and 2010. The report states, “The Tunis stock exchange index also experienced exceptional growth, reflecting strong earnings of listed companies—most notably banks—as well as abundant liquidity in an economy with relatively limited alternatives for financial investment.” If parts of the economy are growing and developing, why has persistent unemployment and a strong government hand driven Tunisians to violent protests?

Part of the problem with generating sustained economic growth in developing countries is ensuring that sound institutions—both political and economic—build the trust of Tunisians as well as their trading partners and visiting tourists. Much of the Tunisian economic growth depends on demand in Europe for Tunisian goods as well as a strong tourism sector.

Political unrest is perpetuated, in part, by corrupt and criminal activity in the country. Global Financial Integrity estimates that the amount of illegal money lost from Tunisia due to corruption, bribery, kickbacks, trade mispricing, and criminal activity between 2000 and 2008 was, on average, over one billion U.S. dollars per year: specifically US$1.16 billion per annum.

With a population of approximately 10.6 million that means almost $110 are lost per person per year in the unrecorded transfers of illegal capital. This is money, desperately needed by the people, that is siphoned off by the wealthy and political elite annually.

Tunisians are hungry and willing to riot for change. Hopefully, in the wake of this violence, the international community will be able to facilitate a more open and free political system in the country – one that makes political officials more accountable to their people and curbs the illicit flows fleeing the country….fleeing like Ben Ali.

Editorial Note: On January 18, 2011, Global Financial Integrity will release its new report, Illicit Financial Flows from Developing Countries: 2000-2009, measuring illicit financial flows out of 160 different developing countries. Sign up here to receive notices when new GFI reports are released.