Hamza Meddeb
Tunisia’s informal trade networks reflect growing trends: the country’s progressive shift away from Europe, and the rise of Turkey and China as major trade partners.
PART (II)
Reconfiguration of Informal and Illicit Trade Networks After the 2011 Uprising
The 2011 uprisings in Tunisia and Libya disrupted the border economy and all of its internal agreements. The power vacuum allowed new networks to flourish on both sides of the border—especially in Libya, where anti–Muammar Qaddafi forces reorganized trade networks in western Libya.
The fall of the Ben Ali ended the privileges of former cronies, who scrambled to find new protectors and new arrangements with the emerging political elites. Law enforcement bodies and state bureaucrats, freed from the control of Ben Ali and his relatives, engaged in a sort of “entrepreneurial corruption” whose sole objective was to accumulate personal profits with no political agenda (as opposed to the politicized motivations found under the former regime).
At the same time, fierce competition among and between land and maritime trade networks intensified. The collapse of the old political order dismantled the barriers and the arrangements that favored certain groups and excluded others. As instability created opportunity, new players emerged onto the scene.
In the two years immediately after the fall of the regime, the security services’ difficulties in controlling the borders and the intensification of acts of terrorism led to increased stigmatization of smugglers and cross-border traders in the public eye.
However, this situation did not last. Tunisia’s war against terrorism, which began in 2013, sought to tighten the security situation and strengthen controls on cross-border networks.
The digging of trenches along the borders; the building (with U.S. and European support) of a 125-mile (200-kilometer) fence along the Libyan border; and increased numbers of roadblocks and patrols carried out by the police, the National Guard, and the army have all restricted the flows of goods and steadily reduced the numbers of traders active in cross-border trade.
Although Libya once was a regional hub for informal trade, since 2015 this trade has fallen off sharply. The renewed deployment of the security forces and increasingly coercive regulation of informal trade have contributed to the decline of the border economy.
Consequently, smugglers and traders have had to compete to position themselves under the protection of state agents in order to secure their profits as best as they can. Informal trade has been reshaped by the new security context.
Notably, the crackdown on land corridors after the launch of the war against terrorism, with the accompanying decline of the border economy and massive corruption among law enforcement bodies, benefited maritime corridors. The tightening space for border economies ultimately favored large networks that imported commodities by sea directly from Turkey and the Asian markets, rather than smaller-scale, land-based networks that could not match their larger competitors’ prices or volume of goods.
These maritime networks reflect the permeability of the borderline between the formal and informal economies, forming a foreign trade sector whose activities appear to be governed by formal procedures but are in fact partly unregulated and unrecorded by the state.
The Slowdown of Border Economies and The Polarization of Cross-Border Networks
The securitization of border regions and the crackdown on smuggling networks with Libya have drastically increased the operating costs for al-khat trade networks across the border with Libya and limited the flows of goods and products that used to supply the Tunisian economy.
Changes in Libya itself, including the fall of oil prices and the reform of subsidy regimes, have also slowed activity in the border economy. Increased police, army, and customs controls at the Libyan border continue to hinder informal cross-border trade, all in the name of greater security.
However, these counterproductive measures merely polarized the trading community between “big” and “small” land traders at the Libyan border and, more importantly, enabled the expansion and growing sophistication of the transnational informal maritime networks that took advantage of the marginalization of al-khat to fill Tunisia’s economic vacuum.
Despite the increasing securitization of the border regions, the Tunisian authorities have been unable to put an end to the al-khat land corridor entirely. Although the government reported the seizure of more than 2.5 billion contraband articles between December 2015 and January 2016 alone, other reports indicate that fence breaches and corrupt border guards have allowed smuggling to continue.
Moreover, the limitations on informal flows of goods have provided advantages to larger, well-structured smuggling networks that continue to operate, now with less competition from smaller operators.
“Big” traders have warehouses and transporters working for them, and they use Libya as a transit point. Goods coming mainly from Turkey and China are delivered and stored in Libya, then moved to Tunisia through arrangements with Tunisian security services and Libyan armed groups.
The “small” traders operating through al-khat, by contrast, are merely sellers in the street markets or transporters who supply these shops. The fragmented security landscape in western Libya has left small Tunisian traders at the mercy of the forces controlling the Libyan side of Ras Jedir. Even as large networks operate with comparative ease, small traders often face extortion by the armed groups that control the trading routes.
Realizing that it had to alleviate the pressure on the borderlands, Tunis began to allow ad hoc civil society groups and local municipalities to engage in grassroots initiatives and people-to-people diplomacy, which resulted in cross-border trade agreements with localized Libyan power centers.
These grassroots agreements initiated by and between nonstate actors became the norm. However, given the fragility of the security situation and the rivalries between Libyan factions, these compacts have failed to provide sustainable mechanisms for the trade that Tunisia’s eastern borderlands need for survival.
More importantly, the Tunisian side has its own fragmented trade landscape, characterized by the polarization of actors driven by divergent interests. Civil society groups and small traders, who want to secure a lasting agreement to support a viable economic future, accept the ceiling on the value of transported goods that the Libyan authorities require as part of their fight against smuggling and the management of shortages in the Libyan economy.
The larger traders, by contrast, seek to break free from the agreements and arrangements put in place at the border in favor of securing maximum profits and market share. They have the capacity to pay Tunisian security forces and Libyan armed groups services to ensure exclusive access to certain commodities and secure their transit through Tunisia.
Following the closure of the Ras Jedir border post during the summer of 2018 after a conflict erupted there between Tunisian and Libyan authorities, the traders’ association of the southeastern town of Ben Guerdane organized a sit-in with the slogan “You let us pass; we let you pass.” It was a message to the Libyans that Libyan travelers would not be allowed to travel to Tunisia for healthcare or tourism if the passage of goods was not restored.
After several meetings between representatives of civil society on both sides of the border, an agreement with the Libyans was reached (albeit under extreme pressure) before the Tunisian security forces dismantled the sit-in.
This agreement authorized each traveler—understood as a trader in the Tunisian case—to transport small amounts of various goods (for instance, two air conditioners, three tires, or a few cans of fuel), up to a maximum of 10,000 Libyan dinars ($2,225), in return for a tax of 450 TND (Tunisian dinars; this amount is worth about $165) at Tunisian customs.
However, such an agreement would have handicapped the activities of big traders who convey large quantities of goods from Libya. It is in their interest to ensure that there is no ceiling on the value of transported goods, or at least confirm that the ceiling is high enough to make their arrangements profitable.
The large-scale traders managed to get this agreement dropped in September 2019 and negotiated to raise the ceiling of imported goods to 150,000 TND ($54,500), with 3,500 TND ($1,275) in tax. A few days later, the ceiling was abolished entirely.
In their negotiations, the major Tunisian smugglers also had a big ally on the Libyan side: forwarding agents from the city of Zuwara, who operate in the vicinity of the border post of Ras Jedir. The Zuwara forwarding agents are not an official body; rather, they are brokers who are paid by the big traders to facilitate transactions at the Ras Jedir border crossing where they have set up offices.
When the 10,000-Libyan-dinar ceiling agreement obtained by the small traders was being drafted, the Zuwara freight forwarders went armed in front of the Zuwara municipality, on the Libyan side of the border, to denounce it. “They besieged the municipality and managed to derail the agreement within twenty-four hours,” explains a member of Ben Guerdane’s traders’ association.
On the Tunisian side, Zuwara’s forwarding agents coordinate with Tunisian brokers, who act as intermediaries to facilitate the passage of goods with the help of their connections to Tunisia’s multiple security corps.
For these reasons, the Libyan freight forwarders of Zuwara and the Tunisian brokers have no interest in seeing the existence of a clearly established agreement with a ceiling and a defined amount of tax to be paid, as they take advantage of the border’s opacity and possibility of negotiating taxes illegally.
Another group seeking to profit from the deteriorating security situation in Ras Jedir and the tensions between traders in Ben Guerdane and Zuwara is the smugglers of Dhehiba. Those who operate through Dhehiba—a secondary crossing point in the Tataouine region of southern Tunisia, close to the Libyan border—have inserted themselves as transporters into a supply chain that stretches from Tripoli to Ben Guerdane and beyond.
Dhehiba’s smugglers became solid partners for Ben Guerdane’s big traders, who were looking for other crossing routes to transit highly taxed or prohibited goods, such as tobacco. The smugglers of Dhehiba are in charge of moving goods from the nearby Libyan town of Wazen to Dhehiba.
Their transport chain includes the Libyans, which makes their trade more secure and provides an incentive to share the gains. In a visible sign of the major cross-border networks’ capacity to adapt over recent years, the large-scale smugglers are now equipped with four-wheel-drive Toyota land cruisers—among the only cars capable of driving in the desert, crossing the sand dunes, and being effective in car chases with the security forces.
Small-time smugglers, who start in the business with only limited equipment, cannot compete with these well-organized, well-supported groups.
Nevertheless, the general uncertainty at the Tunisian-Libyan border, caused by a chaotic security landscape and unpredictable shutdowns, explains why the border economy is struggling to survive. Only the most powerful informal networks have been able to remain in business.
Although the border economy used to be a source of income for thousands of people from the southern areas of Tunisia and helped to supply souks in the interior regions, this is not the case any longer. The volumes of goods being transported have dropped drastically, and anything that is brought in must rely on the larger smuggler networks that can cope with local instability.
With the falling-off of trade over land corridors, the traders who service Tunisia’s souks and bazaars are seeking to secure their supply chain through maritime networks.
The repression of Tunisian-Libyan land-based suppliers has reconfigured cross-border networks by galvanizing activity in maritime corridors. As the souk of Ben Guerdane is being replaced by greater activity in Tunisian ports such as Sousse, Sfax, and Tunis, even the big land traders are finding it difficult to compete against the maritime traders and networks.
***
Hamza Meddeb is a nonresident scholar at the Malcolm H. Kerr Carnegie Middle East Center, where his research focuses on economic reform, political economy of conflicts, and border insecurity across the Middle East and North Africa.
___________
