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The Norwegian newspaper Aftenposten released a series of US diplomatic cables from 2006 on massive and pervasive corruption and nepotism in Tunisia and its effect on economic development and social problems. The cables show that the United States government was fully aware of the dangerous and debilitating level of corruption in Tunisia, and its anti-democratic implications. But they raise the question of whether Washington was wise to make Zine el-Abidine Ben Ali, despite his clear foibles, the pillar of its North Africa policy because of his role, as a secular strongman, in repressing Muslim movements (as William MacLean of Reuters argues).

The US embassy in Tunis noted the contradictions of what was once called ‘the Tunisian miracle’– relative stability and security and 5% growth a year, but with Mafia style corruption on the part of ruling cliques that was discouraging foreign investment and contributing to failing banks and high unemployment.

Most debilitating, and destabilizing, has been high levels of unemployment, especially for college graduates:

‘ Unemployment, however, is a growing concern and is one on which every GOT official is focused. Official unemployment figures leveled off at 14 percent in 2005, after a steady declines dating from 1999s 15.8 percent. Even at 14 percent, however, this figure is consistently challenged as too optimistic by first hand accounts of university graduates unable to find jobs and reports of increasing numbers of ever-more qualified applicants seeking Embassy jobs.’

It was in some important part the college-educated unemployed and their sympathizers that brought down Ben Ali’s regime.

The cables recognize the pervasiveness of government corruption, and the scandals it gave rise to. The cables estimate that 50% of the country’s economic elite was somehow related to President Ben Ali, and warn that they were increasingly showing off their opulence in public, raising the hackles of the poor and unemployed. Among those mentioned in the survey of nepotism was Imed Trabelsi, favored nephew of former first lady Leila Ben Ali, who was stabbed to death on Saturday in the course of the popular uprising.

‘ In early 2006, Tunisias Arab Institute of Business Leaders and the Young Entrepreneurs Center released separate investment climate surveys that pointedly criticize Tunisias declining levels of business confidence, suggesting the “good connections required for business success” is a chief culprit (reftel). A “cumbersome administration” and difficulty accessing capital are also notable obstacles for businesses here. ‘

The cables are eloquent about the corruption of the Ben Ali and Trebulsi clans (the relatives and in-laws of the president) and the way it had begun dragging down the economy. The key was a kind of regime insider-trading. The dictator Ben Ali approved all new projects, and:

This arrangement has permitted President Ben Alis extended family (siblings, in-laws, and distant relatives) to become aware of, to assert interests in, and to carve out domains in virtually every important sector of the Tunisian economy.

The Family was alleged to have been especially advantaged in real estate deals and importation of foreign goods. In addition, the corruption got to the point where it greatly weakened the financial system, because the Family threw lots of bank loans (presumably on favorable terms) to cronies who never paid them back:

‘ The weak financial system has also been manipulated. One local financial expert blames the Family for chronic banking sector woes due to the great percentage of non-performing loans issued through crony connections, and has essentially paralyzed banking authorities from genuine recovery efforts.’

A corrupt, closed economic elite that grabs most of the new income arriving in the country and acts so irresponsibly that it even weakens the foundations of the banking system? Does any of that sound familiar to American readers?

The pervasive and high-level corruption in Tunisia badly hurt foreign investment, which in turn hurt employment. There was even an attempt to shake down McDonald’s, which had spent 7 years making costly preparations to enter the Tunisian market, what with licences, real estate leases, finding local partners and suppliers, etc.:

These tactics have also negatively impacted U.S. investment — the prime example of which is McDonalds unsuccessful seven-year effort to invest in Tunisia in the 1990s…. Their investment, however, was scuttled by a last minute intervention by First Family personalities who reportedly told McDonalds representatives that “they had chosen the wrong partner.” The implication was clear: either get the “right” partner or face the consequences: McDonalds chose to pull out completely at great cost.

The extent of the corruption involving the Ben Ali and Trabelsi clans was so great that it not only had bad economic effects, but impeded democratization efforts:

‘ Today, elite Tunisians boldly, if not publicly, denounce Ben Ali and the Trabelsi family as uneducated and uncultured nouveaux riches whose conspicuous consumption is an affront to all patriotic Tunisians. Some fear that this new phenomenon is sucking the life-blood out of Tunisia — leading to a spiraling educational, moral, social and economic decline. Worse, many civil society activists speculate that corruption — particularly that of First Lady Leila (Trabelsi) Ben Ali and the broader Trabelsi clan — is the fundamental impediment to meaningful political liberalization. ‘

Despite its vast extent and potentially severe consequences, the cables say, the corruption of the First Family was a red line for the press and could not be publicly discussed in the newspapers. At least one major prosecution of a journalist for political slander was pursued when he slammed the Trabelsis.

(In this regard, the inability of the regime to shut down millions of Twitter and Facebook accounts or to control YouTube was not entirely inconsequential.– Juan)

Four and a half years ago, the US embassy was sanguine about the situation continuing, because it thought the Tunisian public mired in apathy: