Tunisia: State changes its strategy on prices and smuggling

Dialogue started alongside repression

27 April, 11:01

(ANSAmed) - TUNIS, 27 APRIl - Smuggling and its direct consequence, "parallel trade" as they call it in Tunisia, is having a huge impact on the country, because it is the cause of significant fluctuation of domestic markets. It is consumers who pay the consequences of this phenomenon, and protection measures adopted by the government are not enough anymore. The unbalance in markets is mainly due to inappropriate implementation of basic economy rules and, therefore, to constant lack of control over prices, especially with regard to largely consumed food products, but also to seasonal food products, whose prices should not be subject to increases, at least in the season they are produced in. The old problem of smuggling has increased in recent months, due to two main factors: the hunger for food products in Libya and the expense potential, which is higher in Algeria than in Tunisia. These elements all together contributed to creating two constant flows of goods departing to the borders of the two neighbouring countries, depleting domestic markets of those products supported by the State with significant tax relief, rather than money.

So, if bringing products to Libya and Algeria was "a tradition" before, now it is a highly profitable business. The State is losing significant tax revenues in this way and has tried to make up for it by implementing repressive policies, trying to make everyone comply with the laws. Not an easy task if you consider that the borders between Tunisia on one side and Algeria and Libya on the other side are not "Berlin walls" and goods continue to cross them in spite of the customs agents' efforts. The government is tackled by the challenge of finding a solution to an already fossilized phenomenon, without waging a war on producers. The first and most urgent issue to be solved is that prices in domestic markets continue to reach very high peaks, sometimes in a totally irrational way. And when the State intervenes to bring down the price of some large-consumption goods (as it recently did with eggs, by fixing a minimum price), it must face the opposition of producers, distributors and retailers, each concerned by the concrete possibility of losing their share of gain.

This is why the Minister of Trade decided to walk a different path, which is probably longer but more likely to generate positive outcomes: dialogue. He did it in Biserta, where 24 distributors and retailers decided to lower prices of their own free will, having decided to bet on positive effects of their policy. Some small sign of success is showing, such as the slow decrease in the price of some agricultural products which are currently out of seasons, such as legumes, over last year's price. This is only a small sign because, indeed, the real test is carried out everyday: you only need to go to a market to see how people just do not understand how can prices go up so constantly for all products.(ANSAmed).