Tunisian Economy Threatened as Libya Unravels

In addition, ESCWA said that the informal trade between Libya and Tunisia was considerable and could be as high as half of the total trade between the two countries. Informal trade takes place mainly through the border post of Ras Jedir. Its shutdown due to the deteriorating security situation in Libya has had a huge impact, given that the informal trade in the region is significant.

Informal trade involves a large number of people, such as carriers, street vendors, seasonal retailers, wholesalers and Tunisian consumers for whom this activity makes goods more affordable. In addition, various goods from China and Turkey enter Tunisia through Libya because of differences in tax rates, which can be as high as 78%. Instability has hampered official Libyan trade routes, so informal trade has become even more vital for needed imports and for exports, which provide revenue in hard currencies.

The economic impact of the shutdown of the Tunisian-Libyan border is difficult to estimate. It is reported that the unemployment rate for Ben Guerdane is 2% lower than the average in the Medenine governorate, where unemployment stands at 11%. Up to 20% of the workforce, including 83% of the people in Ben Guerdane, are involved in informal trade in the region, making informal trade the main source of employment.

ESCWA cited a UNDP report stating that 10,000 to 15,000 families have had no income since February 2011, when the revolution in Libya broke out. It could be that this is a consequence of the Libyan crisis.

Regarding tourism, the report estimated that about 1.8 million Libyan tourists visited Tunisia each year. Referring to a study by the African Development Bank, it has been shown that Libyan tourists spend an average of 200 to 400 dinars ($115 to $230) a week. On the other hand, medical tourism has become a powerful driver of economic growth in Tunisia.

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