Financial Crime World

White-Collar Crime Plagues Tunisia’s Economy: Experts Warn of Devastating Consequences

Tunisia loses an estimated $1.2 billion annually to illicit financial flows (IFFs), a staggering 3% of its gross domestic product, according to experts. These illegal outflows involve the transfer of unlawfully earned money or capital from one country to another.

The Scale of the Problem

  • Tunisia has consistently ranked high in IFFs and corruption, with the Economic and Social Commission for Western Asia ranking it first for IFFs and eighth for corruption in the Middle East and North Africa between 2008 and 2015.
  • In 2015 alone, illicit financial inflows made up $2.6 billion (11.4%), while outflows constituted $1.28 billion (5.6%) of Tunisian trade.

The Main Source of IFFs

  • Government corruption at the highest levels is the main source of IFFs in Tunisia, with millions lost to graft and embezzlement.
  • The smuggling of goods between Tunisia and its neighbors Algeria and Libya generates an estimated $2.4 billion and $1.8 billion, respectively.

Experts’ Warning

  • Corruption is a destabilizing force leading to the decay of the economy, politics, and security in Tunisia.
  • The loss of income through IFFs has a profoundly negative impact on the country’s economy, with key sectors such as healthcare and education suffering as a result.

Call to Action

  • Governments and central banks from world financial centers, including London and Switzerland, must share responsibility for combating IFFs and recovering public funds sent abroad.
  • More officials are needed to investigate and handle IFFs, and regular data on the scale of the problem is lacking.

Sources of IFFs

  • The United Nations Economic Commission for Africa estimates that IFFs originate from three sources: commercial activities, criminal activities, and corruption.
  • Each of these is present in Tunisia, with government corruption at the highest levels being the primary source of IFFs.

Experts’ Solution

  • Comprehensive anti-corruption reforms are needed to staunch the outflows draining the country’s economy.
  • Without such measures, Tunisia risks continued economic decay, political instability, and a worsening security situation.

Quote

“Corruption and IFFs didn’t stop after the fall of Ben Ali,” said Abdelkader Abderrahmane, Senior Researcher at ENACT project, ISS Regional Office for West Africa, the Sahel and the Lake Chad Basin. “Other actors are now engaged in graft but with smaller financial gains. This widespread corruption is perceived to be endemic, affecting different strata of Tunisian society.”