Corruption costs Egypt $6 bn annual loss

Last Updated: Friday, February 11, 2011 - 15:45

Washington: Crime and corruption cost Egypt approximately USD 6 billion per year and a total of USD 57.2 billion from 2000 to 2008, according to a report by Global Financial Integrity (GFI).

Much of this money, the Washington-based watch dog group notes, was driven out by personal tax evasion, in addition to corruption and crime.

The recent report also noted that the Middle East and North Africa region, including Egypt, has the highest rate of growth for illicit financial outflows (IFFs).

"What is happening in Egypt is the result of a systemic condition of which Mubarak was just one part," said report author Dev Kar. "Weak governance allowed rampant bribery, theft, crime, and tax evasion to drive billions of dollars out of the country every year."

"The annual loss of money, which seriously hampered the government`s ability to stimulate economic development and alleviate poverty, made President (Hosni) Mubarak`s dictatorial regime unbearable and brought Egypt to its current state of social and political unrest," he said.

Egypt ranks third among all African countries for largest exporter of illicit capital with cumulative outflows from 2000-2008 at USD 57.2 billion and USD 6.4 billion in outflows per year.

Breaking down the population into five groups, or quintiles, one can see that in 2005 the lowest fifth of the Egyptian population held 8.96 percent of the country`s income and the highest quintile held a whopping 41.46 percent share of Egypt`s income, GFI said.

According to the GFI report, from 1970 to 2008, the North African countries of Algeria, Egypt, Libya, Morocco, and Tunisia collectively lost more capital per capita than any other group of African countries.

The cumulative loss of illicit capital from North Africa over this 39-year period amounted to a staggering USD 1,767 per person.

Over the period 2000-2008, three of the five North African countries, Egypt, Algeria and Morocco, cumulatively lost USD 57.2 billion, USD 13.6 billion, and USD 13.3 billion respectively, ranking among the top six exporters of illicit capital from the continent, while Tunisia-which lost USD 9.3 billion-ranked tenth.

Egypt is witnessing political turmoil following intense protests seeking the ouster of Egyptian President Hosni Mubarak. The protests, which began on January 25, quickly spread across the country.

Mubarak, 82, has, however, refused to step down. But, he says, he will not be running for the next election. The protesters are determined to oust him and have made up their mind to scale up the demonstrations.

IANS




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