Friday, June 26, 2015

Corruption in Old Tunisia

Recent reports about the corruption of the old regime in Tunisia, under President Zine el-Abidine Ben Ali, reveal some of the issues that drove the Arab Spring revolts. The protesters were convinced that their governments were not only authoritarian but also stealing from them, and new reports on the Ben Ali regime show that they were not wrong:
A new research paper by World Bank economists released Thursday shows that companies owned by relatives and close allies of Mr. Ben Ali defrauded the state of $1 billion to $2.6 billion over a seven-year period 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 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 percent of all net private-sector profits in Tunisia, the report said.
So you can see why people were angry, and why they wanted to blame their poverty on the regime.

But on the other hand the removal of Ben Ali has not led to better economic times for most of the people; quite the contrary. The stability Ben Ali created, and his salesmanship with foreign investors, were very valuable, and their loss has had repercussions for all the citizens. I hope that in ten years Tunisia will have emerged from its slump and become a beacon of democracy and prosperity in the Arab world, but there is still a good chance that it will instead slide back down into civil war and terrorism.

Was corruption the problem? I have long been wondering how bad a thing graft really is, because sometimes it seems to me that it can be made to work very well. My instinct of course is to think that corrupt greed is always a force for evil, but because that is what I want to believe I have my doubts as to whether it can really be true. After all very few societies have met the standards of contemporary Denmark, and yet life goes on. In the 1865 to 1900 period the United States was very corrupt, more so than ever before or since, but it also enjoyed astonishing economic growth. Maybe things would have been even better without the Goulds and the Rockefellers siphoning off millions to their private accounts, but maybe corruption sometimes eased the way for modernization that would otherwise have been hard to achieve. (Could the railroads have been built without corruption?) Rapid industrialization has very often been accompanied by massive corruption and the accumulation of ill-gotten fortunes, from Britain in 1800 to China in 1995.

The history of the Arab Spring introduces another variable, whether corruption can contribute to stability. I would certainly never want to defend the regimes of Ben Ali, Mubarak, and so on, but on the other hand they at least kept the people fed and the lid on chaos. Maybe if they had been less corrupt they would have done even better, and the economies of their nations would have prospered; but on the other hand maybe keeping the wealth concentrated in favorite groups like the generals and the judges helped them keep control. Corruption involved stealing from many people, but among the beneficiaries were certain favored groups of the poor -- dictators and their wives had favorite charities to which businessmen who wanted their favor donated lavishly. Cheap bread for the poor was a feature of all those regimes.

I want to believe in democracy and fairness, but it may be that they can work only in prosperous, united countries. Recent events show that democracy can be dangerous, exacerbating tensions between different ethnic, regional, and class groups, to the point of civil war. I believe that more economic democracy would help the poor and the middle class in America, because our system is strong enough to survive any turmoil it would cause. But my insights into my own society do not necessarily translate readily into other places where very different people are living very different lives.

And yet -- are there no limits to greed? Why do people like Ben Ali and Rockefeller refuse to be happy with great wealth and power and insist on grinding on beyond the limits of what anyone could possibly use? Why keep piling billions upon billions instead of settling down with the first billion and starting to work on your reputation and place in history?

1 comment:

Shadow Flutter said...

CBS is reporting gunmen opened fire at a popular resort in Tunisia -- at least 27 dead. This is the second such attack in a few months. The Mid-East is falling apart, and it will get worse before it gets better. Am I wrong in thinking ISIS has far more soldiers/followers in the field than this administration admits? Hold territory in Syria and Iraq, attack on multiple fronts, spread into places like Libya and Tunisia and Yemen.