BEN GUERDANE, Tunisia — The main street on Ben Guerdane, a frontier town in southeast Tunisia that is about 30 kilometres from the Libyan border, is lined with goods stockpiled outside shops as trucks, vans and cars transport everyday products from Libya.
On July 10, Tripoli closed the border with Tunisia, but the passage of all goods except for fuel was banned from the Libyan side for about a year, according to businessmen on the Tunisian side. The formal closing of the border, however,lasted more than six weeks triggering protests by traders in Ben Guerdane.
The closure came after 200 Tunisian protesters blocked Ben Guerdane’s main road in June citing mistreatment by the Libyan border authorities at Ras Jedir, Tunisia’s main border post with Libya, and “unfair” Libyan trade policies.
As Ras Jedir reopens on September 1, relative calm prevails. The re-opening came several hours after the closure of Tripoli’s only working airport due to fighting in the Libyan capital.
Though business is limping back to normal, tradesmen in Ben Guerdane lament heavy losses as a result of the long halt to the goods smuggling via the border.
Sitting at a cafe, 40-year-old Salah Lacheheb, a small trader specialised in tapestry, explains how his business has been severely affected.
“When Ras Jedir is open, I earn anything between TD 1,000 and 1,800 ($350-650) a month as it always varies. When it’s closed, nothing.”
The merchant went on to say that the border has been subjected to closures on and off in the past years.
“My bank account has been in the red for a long time now.”
Husband and father of four small children, Lacheheb is the only breadwinner in his family. After a scant 10 percent average gain for each item sold and accounting for business expenses, he is left with not enough profit to make ends meet.
The economic misery suffered by the people of Ben Guerdane border town is by no means new. It is reflective of an old policy of neglect by the Tunisian state in a part of the country that sees little to no development while investment continues to concentrate in the capital city and coastal areas.
The absence of state
Ben Guerdane essentially lives off a smuggling economy dealing in petrol and consumer goods. Petrol is sold in informal roadside stations across the south. Transporters carry consumer goods across the border, wholesalers distribute them amongst traders, who sell them in stores across the country.
“In the absence of the state, with a very weak economy in this region, informal trade is an essential source of living,” said Mohamed Kouni, assistant professor of economics at University of Gafsa’s Higher Institute of Business Administration.
Tunisia’s informal sector accounts for approximately 60 percent of the national economy, Kouni said.
The major types of goods passing through the Ras Jedir border post include fuel, tobacco, electronics, home appliances, clothing, bananas and apples. Goods such as fuel are either heavily subsidized in Libya or more heavily taxed in Tunisia, making their sale on the Tunisian market more profitable.
A 2017 World Bank report estimated informal fuel imports from Libya into Tunisia at 495 million litres in 2015 (accounted for 17 percent of Tunisia’s consumption in 2014), with a market value of at least $107 million (TD 297 million), five times the 2013 estimate of $24 million (TD 67 million).
The value of informal merchandise imports from Libya is estimated at $214 million in 2015, while the number is pegged at $89 million on imports from Tunisia to Libya.
Drawing figures from a 2013 study by the World Bank, Kouni observed that, on the other hand, there is a considerable loss of state revenues linked to informal trade which amounts to about $432 million (TD 1.2 billion). The government cannot generate any sizeable tax revenues on the goods since most of the supplies are procured illegally from the other side.
A flat rate of $18 (TD 50) tax is levied on each commercial vehicle crossing the Libyan border, however.
Yet, informal cross-border commerce is the lifeblood of the Ben Guerdane population. Although illicit, trade through the Libyan border is very much normalised as most activities there occur in public and are fully visible.
Efforts to control trade flows have periodically angered Tunisian residents in the border town leading to protests. The Ras Jedir crossing has been closed several times in recent years, resulting in repeated tensions on the Tunisian side. Security forces used tear gas to disperse the crowd.
Tunisian authorities have cited difficulties in negotiating with Libyan counterparts over customs arrangements amid the chaos that has engulfed Libya since the collapse of the country’s former leader Muammar Gaddafi in 2011.
Married with three children, Fathy Maayen has 20 years of experience as a merchant. He works with his father and siblings in both the informal and formal sectors of commerce.
Whenever Ras Jedir is shut, the 38-year-old trader has to resort to formal trade in the mainland which is less profitable than trading informally via Libya where the goods come at cheap tariff rates. From his experience, customs duties on imported items set by Tunisia are very high, in some instances up to 90 percent of the product’s real value.
“There’s no economic stability in this kind of business,” Maayen said. “I have to come up with backup solutions all the time since this is my source of income.”
Informal versus formal economy
Kouni put unemployment in Ben Guerdane at almost 20 percent and made a similar estimate for the entire Medenine region highlighting the disastrous effects of Ras Jedir closure on local development.
Kouni warned against measures such as hardening the border and trying to crack down on smuggling as long as contraband and informal commerce are the key sources of employment for the border communities, and alternative businesses in the formal sector remain scarce.
For Kouni, the ideal scenario is if Tunisia incorporates informal commerce into its formal economy, and reduces customs duties on imports which, in his view, would contribute to “promoting competitiveness,” and “boosting growth” in the Tunisia–Libya border region.
And for Lacheheb, if the state is able to come forth with a development plan for the border towns and create job opportunities – that will make the difference.
“Ras Jedir cannot be the only economic source to rely on,” he argued, “we need investments in alternate sources of income without dismissing the commercial asset of Ras Jedir.”
The two-month closure was felt on the Libyan side too.
Libya unilaterally shut its border following protests over anti-smuggling measures, reported harassment and attacks on Libyans transiting Ben Guerdane after Tunisian smugglers disrupted the border traffic. While Ras Jedir was closed, many Libyans on their way to Tunisia rerouted to the country’s Dhiba border crossing in order to avoid being stuck in the borderland.
Days after the reopening of Ras Jedir, most Libyan travellers stopped in the streets of Ben Guerdane to purchase Tunisian dinars from Sarrafas or informal foreign exchange agents and hurried to continue on their journies.
A few who walked by a street nicknamed “Wall Street,” where most Sarrafas operate, spared some of their thoughts on how the situation at Ras Jedir affected them.
“I visit Tunisia for medical reasons. After over one month and a half closure, I don’t feel well but I’m now here, thank God,” Mohammed said.
“We come from a very difficult life with the ongoing fighting in Libya, Tunisia is our hope. The border should be kept open,” Fatima said.
“I’ve been affected by this border closure since I got less work, of course,” nodded Salah, a taxi driver who routinely takes Libyan passengers to Tunisia via Ras Jedir. “We want to keep friendly relations with Tunisians. I hope these issues between Libya and Tunisia can be resolved,” he said.
Originally published in TRT World