Tunisia's Proposed "Reconciliation Law" Would Grant Amnesty for Corruption, Fail to Grow the Economy


Last year, widespread protests led the Tunisian government to abandon the “Reconciliation Law,” a bill that would have granted a form of amnesty to corrupt business people and Ben Ali-era officials who otherwise could have been put on trial. The government argued that the law would stimulate the Tunisian economy while offering a sort of "reconciliation”. In reality, it would have legalized stolen assets and allowed corruption to go unpunished.

The same bill has been brought before parliament again and remains as ill-devised now as it was last year. We sat down with Dr. Abdeljelil Bédoui, professor of Economy at Tunisian University and a founding member of the Tunisian Forum of Economic and Social Rights, to discuss the law and what it would mean for Tunisia if it were passed. Bédoui explains why the bill would not generate economic growth and details why Tunisia needs the rule of law, not impunity, as it seeks to reestablish its economy in the wake of corruption.

The government says that this law will grow the Tunisian economy. Is this possible?

This law will not meet the needs of the Tunisian economy. For corrupt officials, the Reconciliation Law may be considered a legislative amnesty, a fiscal amnesty designed to facilitate their immunity with minimal costs. I personally do not see how an individual who is known to have amassed his fortune by violating the law, using his privileged positions, and leveraging his proximity to power, can contribute to the growth and development of the economy in the first place. In principle, a person found guilty of corruption can be beneficial neither for himself nor his country’s economy.

Saying this law, which portrays corrupt people as entrepreneurs and businessmen, is badly needed by the economy is deceptive, because these people have ruined the economy and their wealth resulted from the destruction of the economy and not from the growth of the economy. Economic development in fact needs businessmen and entrepreneurs who respect the law, who create wealth from personal initiatives, innovations, the sense of bravery and venture.

Do you believe the law will be able to reclaim illegally amassed holdings and contribute to public funds?

The process laid out in the law is a sort of financial transaction, and does not identify all illegal assets. This means the Reconciliation Law will not significantly contribute to public revenue.

We know that the authority overseeing the financial transaction is connected to the executive branch. Whoever the individual charged with making these rulings, however honest and trustworthy, will endure immense pressure, interference and lobbying to influence his or her decisions. This will create a situation that is hard to resolve later.

It will also be difficult to verify all of the declarations that will be submitted under the proposed law. For instance, an individual who stole hundreds of thousands or millions will not declare everything he stole but will declare a small portion of his assets in order to avoid losing everything. The government will not be able to verify what he actually owes, leading to disappointing financial returns.

What implications does the law have on transitional justice measures in the country?

What bothers me most is the fact the proposed law focuses on making financial transactions with corrupt individuals instead of combating the system of corruption they engaged in. Addressing systemic corruption requires knowledge and understanding of the corruption at hand: the government must understand the network, the structure, the mechanisms, and the stakeholders involved in the corruption. Once that understanding has been achieved, a plan may be designed to combat corruption and dismantle this network.

But the process of reconciliation [proposed by the law] has been restricted to a financial transaction between individuals, not a settlement of accounts. This means that reconciliation has lost its essence and raison d’être because within the agenda of the Transitional Justice for the Truth and Dignity Commission, there is obligation to set up a new system that would prevent corruption.

So you don’t believe the law will boost the economy. What will?

The process of development requires a set of conditions that are likely to incentivize investment. Investment is a big problem in Tunisia as the country transitions towards a market economy. During this transition, the state has disengaged from its economic role and its share of investment has grown smaller in the past five years.

Our problem is that our government has abandoned investment and privatized parts of the economy, but the private sector has failed to provide compensation in return and with the required paces. For 25 years or more, since the advent of the structural adjustment programs until now, the average public investment in Tunisia has not exceeded 25% of GDP. All analyses say that in order to face unemployment and inequality and to promote regional development and social justice, we need 30% of GDP to be publicly invested.

Unfortunately, we lag far behind that number, and 25% of public investment has become insurmountable threshold. As far as governance is concerned, this percentage represents both public and private investment, 60% of which is comprised by private investments. Tunisia lags well behind other countries like Morocco, Egypt, Turkey and Malaysia in comparison, especially in terms of private sector investment.

Tunisia has reported an 11% investment of GDP while emerging Asian countries are posting 25%. The low GDP investment in Tunisia is accounted for by widespread corruption. This means that investors must think twice before embarking on a venture in Tunisia for fear of seeing the project stolen by means of intimidation, legal or illegal.

There is also the issue of contractual obligations: economic activity requires compliance with property rights, and contracts by both individuals and corporate entities must be honoured. Therefore, the trustworthiness of the judiciary is essential in the event of contract disputes. If justice is not rendered by the courts, there is no way for the litigants to speak out against injustice by making recourse to the media or to free press.

All of these factors and more stand as impediments to investment in Tunisia. Consequently, there is urgent need to address this system by ensuring a minimum level of transparency, judicial independence and compliance with property rights, to make sure that reconciliation can have a correctional and developmental dimension. This cannot be achieved by enabling corrupt people to start anew as if nothing happened. The approach to reconciliation presented by this proposed law is deceptive, a clear contradiction of the new constitutional reforms which require genuine developmental alternatives at the economic, political and institutional levels. If we fail these constitutional advances, the new developmental paradigm will not succeed but will be mere ink on paper.

Therefore, I believe that we must let transitional justice proceed through the Truth and Dignity Commission. We must work with the TDC to unveil and dismantle this network of corruption in order to build a new system that establishes respectable institutional entities and builds trust among the people in general and among investors in particular.

What are the sums that can be recovered because of this law if it was to be adopted? What are the sums that are likely to make any difference to the Tunisian economy?

No one can answer this question because we do not know how much money these corrupt individuals have amassed. We should not expect or hope that people would spontaneously come clean with their personal property reports, so we cannot make accurate assessments of potential state revenue from the law.

But development shall not depend on the recovery of those sums; it shall depend on our ability to create a sense of citizenship. Tunisia needs its citizens to become fully aware of their rights, seriously keen on paying their taxes, complying with labor and commercial laws and fulfilling other obligations… Right now, 50% of our economy is informal. Tax evasion is another form of corruption that needs to be rooted out in order to enable the state to build infrastructure and deliver public services. But I do not believe that the proposed Reconciliation Law is going to make a substantial contribution.

There is an urgent need to combat corruption by setting up a new alternative developmental paradigm.

We need to maintain the development process by setting up the institutions, mechanisms and the traditions that make it possible to create large-scale growth in the long run, instead of focusing on short-term solutions. This will require clean-up efforts: we must eradicate corruption and establish a system that instills a sense of citizenship whereby everyone is invited to serve the Tunisian developmental project.

In the Philippines and Peru, the assets illegally obtained by officials under previous dictatorships and their relatives were seized. But the latter did not benefit from any amnesty. In the Philippines, the Marcos family is still facing criminal liability corruption cases. In Peru, dictator Fujimori was convicted for past violations pertaining to corruption and human rights abuses. In both cases, part of the assets seized from Marcos and Fujimori were used to finance compensation programs, memorial and truth seeking initiatives. Can a similar process succeed in Tunisia, especially with the presence of the Truth and Dignity Commission and Transitional Justice? What kind of mechanisms need to be designed to this purpose?

Of course we need a similar process, one that establishes a genuine alternative development path that will raise investment beyond the 25% threshold I mentioned earlier through accountability and, ultimately, reconciliation. The objective is not necessarily financial; instead, it is about establishing the truth about corruption and dismantling the system behind it. Our objective is not the money, which is of secondary importance. The priority is creating the circumstances that invite development. That is why it is essential to support the process of transitional justice in all of its steps and stages without reprisal or revenge, without any grudge.

What are the mechanisms that need to be set up in order to ensure that the revenues will benefit the people of Tunisia? Do you believe that the government has designed a plan for that purpose?

Unfortunately, the government has no plan. We are dealing with an exceptional period, this so-called “transitional period”. In such situations, we have to apply the law through exceptional measures: for instance, the trade deficit has reached record highs but we still import cars, apples and non-staples as if nothing had happened. This hemorrhage has to be stopped until we can breathe again and recover our macroeconomic balance.

The economic situation cannot wait, especially in a globalized context where competition reigns supreme and the weak are left behind. For instance, when Tunisia’s phosphate production stopped, buyers brokered contracts with other countries – if you are not able to progress, you will lag behind. We therefore need a strong political will and genuine social solidarity to address these root issues. We have all embarked on the same ship and its sinking means we will all go down and become easy prey for politicians. Because of deteriorating civil service, the situation is nearing disaster. Unless we stand firmly to face those issues we will end up in a disastrous situation.

What does the Tunisian economy need, especially in rural areas? What should be done by the government to address those needs?

In such an exceptional situation, we need special measures. First of all, we need to ensure the growth of the public investment because we cannot consider the situation to be an ordinary one and wait for private investment to play the role of the government, especially in view of the security vacuum, the social instability and the fuzzy political situation…

The state is therefore called upon to fulfill its responsibilities because the private sector cannot take great risks in an unstable country. We need extraordinary efforts; we need more resources to facilitate projects instead of administrative, financial and property obstacles. We need to improve production in all regions, involving the right stakeholders, improving local and regional levels as a means to highlight the resources of each region based on the data and their needs.

Finally: What would become of the anti-corruption mechanisms set up by the State if this Law came to be passed?

It will not change a thing.

PHOTO: Dr. Abdeljelil Bédoui, Professor of Economy at Tunisian University and a founding member of the Tunisian Forum of Economic and Social Rights,