Ladies and Gentlemen,

From Tunisia to Yemen to Libya to Egypt, frustration with cronyism and corruption haves played a significant role in the outbreak of protests in these countries. Soon after toppling the regimes in Tunisia, Libya and Egypt, foreign banks began to freeze billions of dollars in assets held by the deposed leaders, their families and the corrupted ruling elite. New governments are tracking hidden wealth by the deposed leaders including foreign real estate and bank accounts worth billions of dollars. While the Arab spring exposed the challenges of development including poor governance and weak institutions, it did highlight the inadequacy of existing international efforts against corruption.

While It is impossible to say exactly how much money has been stolen because monies are moved illicitly through shadow operations which prevent their tracking. Developing countries lose between US$20 to US$40 billion each year through bribery, misappropriation of funds, and other corrupt practices. According to Transparency International, Egypt’s former leader, net wealth is between US $40 billion and $70 billion. More than $6 billion of Egypt’s financial resources were lost to illicit flows per year between 2000 and 2008, accumulating in losses of $57.2 billion from Egypt’s state funds. According to the same source, Tunisian leader, and, his extended family are believed to have siphoned off one-third of the Tunisian economy through corruption and fraud. With the Tunisian economy standing at $44 billion, this means that Ben Ali and his cronies controlled almost $15 billion.

While these illicit financial flows do undermine development and growth efforts in these countries, the actual cost of fraud and corruption practices exceeds the value of the stolen assets. and includes degradation of public administration, deterioration of the investment climate, and the disruption of essential service delivery such as education and health. All this entails a disproportionately adverse impact for the poor. Every USD100 million recovered could fund full immunizations of 4 million children or provide water connections to 250,000 households.

Repatriation of stolen monies makes available additional resources for development activities. The challenge is to ensure efficient, accountable and transparent use of such assets, given states may lack capacity or political will and that corruption may be prevalent at various levels of government. Transparency allows for better utilization of recovered assets, and better targeting of resources into sectors that have potential to benefit the victims of corruption, who happen to be mostly the poor. Lack of effective follow up mechanisms may lead to the inappropriate allocation of resources into sectors that have little effect on alleviating poverty.

ESCWA and Asset Tracing & Recovery specialists from Deloitte Financial Advisory Services LLP (Deloitte FAS) will facilitate an Expert Group Meeting to raise the awareness and facilitate policy dialogue of relevant stakeholders on the subject of asset tracing and recovery and its impact on the economic development of Arab transition countries. The meeting will focus on efforts pursued by governments in the region in the recovery of assets from past corrupt practices of former officials. Participants would also be invited to participate in a discussion on the recent trends in member countries and how the UN system / international community could position itself to further facilitate such a complex discussion.