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economist who co-authored the report. \u201cIt is just that these laws do not necessarily benefit the public.<\/p>\nOur correspondent Andreas Frank reports; In Arabic it is called \u201cwasta\u201d, the connections and influence that grease the wheels of the bureaucracy and helps you get ahead. And the family of Zein al-Abidine Ben Ali, deposed president of Tunisia, had plenty of it.<\/p>\n
A World Bank report confirmed that the Zine el-Abidine Ben Ali regime, ousted in Tunisia\u2019s bent the rules to their own benefit \u2013 cashing in on the country in the process.<\/p>\n
Government regulations on businesses, normally used to protect domestic industry from foreign competition or consumers and workers from corporate abuse, were often times instead used in Tunisia to further the private interests of the Ben Ali family, the authors Antonio Nucifora, Caroline Freund, and Bob Rijkers said.<\/p>\n
The report underlines the depth of the challenges facing Tunisia today three years after Mr Ben Ali\u2019s regime was overthrown, with many of the same rules of business still on the country\u2019s books.<\/p>\n
World Bank researchers analysed previously private tax data provided by Tunisia\u2019s Ministry of Finance and relating to more than 600,000 firms. They found that 220 companies owned by Mr Ben Ali relatives earned 21 per cent of all the country\u2019s private-sector profits between 1996 and 2010, in large part benefiting from rules in their favour.<\/p>\n
The Ben Ali family appeared to know which sectors of the market to enter, staying away from businesses where there was too much competition. Moreover, sectors that piqued the interest of Mr Ben Ali\u2019s family members tended to draw more regulatory activity, the report showed.<\/p>\n
\u201cIt is easier to make money when there are regulations protecting you from competition and even more so when you can create new regulations as needed,\u201d said Caroline Freund, a co-author of the report from the Peterson Institute for International Economics.<\/p>\n
Mr Ben Ali\u2019s clan included Sakher el-Materi, who is married to the president\u2019s eldest daughter, Nesrine. In 2004 he bought Enakl, a state-owned car dealership, for about $16m. Soon after the government quadrupled Enakl\u2019s import quota. Mr el-Materi floated 40 per cent of the company in 2009 and netted 53m Tunisian dinars ($33m).<\/p>\n
He and his wife had by 2010 amassed ownership or stakes in a total of 36 businesses, including a lucrative shipping operation in the Tunis suburb of La Goulette which he set up after being granted a coveted permit to do so. In addition, he was elected to parliament as a member of his father-in-law\u2019s party.<\/p>\n
Companies linked to Mr Ben Ali\u2019s circle on average controlled 6.3 per cent more market share than ordinary businesses, a differential \u201centirely due to Ben Ali firms sorting into [tending towards] the regulated sectors\u201d, the report stated.<\/p>\n
\u201cThere is nothing illegal happening here,\u201d stressed Bob Rijkers, a World Bank economist who co-authored the report. \u201cIt is just that these laws do not necessarily benefit the public.<\/p>\n
Over the years of Ben Ali\u2019s rule, he issued 22 presidential decrees resulting in 73 amendments to the business code. Sometimes they were almost comically shaped to confirm the Ben Ali family\u2019s various business interests. A 2007 rule requiring government authorisation for firms producing cement came as Mr Ben Ali\u2019s brother-in-law established a new company called Carthage Cement.<\/p>\n
At the time US diplomats noted in dispatches to Washington accusations that Mr Ben Ali\u2019s circle were able to win advantages and crowd out competitors. Ordinary Tunisians also grumbled suspiciously at Mr Materi\u2019s good fortune.<\/p>\n
This concentration of wealth in just a few hands also fuelled broad discontent that would ultimately explode into revolution and the Arab Spring. Mr Ben Ali and Mr el-Materi were forced into exile in 2011.<\/p>\n
\u201cWe tend to think of corruption more directly as bribes,\u201d said Ms Freund. \u201cBut what people were upset about [in Tunisia] was this kind of crony-capitalism that characterises the whole region, and other countries as well\u201d.<\/p>\n
Well-connected cliques such as those close to Mr Ben Ali did help drive national growth rates of 4-5 per cent before the Arab Spring, impressing outside observers. Mr Ben Ali earned international praise for his handling of the economy by removing much of the regulations on export-oriented businesses.<\/p>\n
\u201cBy opening up parts of the economy and giving the red-carpet treatment to foreign investors, he gave an impression of a country that was very open to business and investors,\u201d said Antonio Nucifora, lead economist in the Middle East and North Africa region at the World Bank. \u201cWhat this did was take away the spotlight from most of the economy which remained protected by barriers to entry, price control regulations.\u201d<\/p>\n
Unlike Egypt, Libya or Syria, Tunisia managed to squeeze its way out of a political crisis and avoid a descent into chaotic violence or political repression. Tunisia has since then drawn up a consensus constitution that has not only been lauded by the international community but has calmed political nerves after two assassinations last year nearly derailed the country\u2019s transition.<\/p>\n
But Mr Nucifora and his team said Tunisia has yet to unravel the regulatory structure at the heart of the Ben Ali era\u2019s dysfunctional economy, and that business rules and restrictions stifling competition remain in place.<\/p>\n
\u201cIt would be a mistake to assume that following the departure of Ben Ali and his family the cronyism [has] disappeared in Tunisia,\u201d Mr Nucifora said.<\/p>\n
Mr Ben Ali, now in exile in Saudi Arabia, has been convicted in absentia and sentenced to life in prison on charges of corruption, theft and complicity in murder. Our correspondent Andreas Frank reports; In Arabic it is called \u201cwasta\u201d, the connections and influence that grease the wheels of the bureaucracy and helps you get ahead. And the family of Zein al-Abidine Ben Ali, deposed president of Tunisia, had … Continue reading
\nWorld Bank Press Release<\/a><\/strong>
\nAll in the Family – State Capture in Tunisia<\/a><\/strong>
\nRelated reports<\/a><\/strong><\/p>\n![\"A](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2014\/03\/Ben-Ali-300x180.jpg\")
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