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The Other Market

Paralleltrade
The Other Market
Are street side markets that sell tax-free, smuggled goods at prices affordable to the poor a necessary evil?
2/5/2017 | Tunis

All over Tunis, roadside markets crammed with cheaply made, tax-free bargains line streets like Rue d'Espagne or Rue Charles de Gaulle. The imitation clothes brands, sport shoes, perfumes, household appliances and smuggled goods are in high demand among low-income families.

The vendors, mostly young men, are wary of security officers ready to confiscate their contraband at any time.

Mohrez, 40, a black market seller of smuggled garments is a father of three daughters, living in the popular and densely-populated, high crime Sidi Hussein neighborhood. Mohrez gets small quantities of goods –  tissue paper and locally manufactured household items – from a supplier and displays them on the pavement early in the mornings.  He makes a daily profit of about USD 8.

“Praise be to God, I earn enough to give me and my family a decent living, instead of stealing,” says Mouhrez.

Parallel trading activities in Tunisia account for 50 percent of the country’s GDP, (TND 40 billion = USD 17 billion), according to economist Moez Joudi, head of the Tunisian Association of Governance.

Reaching across the food, energy, pharmaceuticals, health subsidies and foreign exchange sectors, Joudi said the state lost around 2 billion Tunisian dinars (USD 870,000 million) in unpaid taxes.

Street vendor Mouhrez believes that most parallel market traders have no other way of earning a dignified livelihood.

“We do not like the idea of moving to relatively distant streets and we refuse to abandon our usual spots along the capital’s pavements.”

A few meters away from Mouhrez’s spot, his friend Rafiq displays readymade garments. Rafiq also rejects the idea of moving away and sees it as an attempt to strangle people’s livelihoods.

Rafiq wears a tracksuit and has a large tattoo on his right arm. He shouts at the top of his voice to attract passersby, hoping to sell some of his women and children’s clothes.

“I have spent half my life in prisons, and I am not ready to spend the rest of it there,” Rafiq says in a husky voice. “The only job that will keep me away from crime is the black market business. And,” he adds, “It is a real support for the poor and middle classes.”

Refused Trade

This parallel trade, which has occupied large parts of the city’s streets, and whose businesses are steadily expanding, has many registered readymade garment merchants worried.

“They have seized the capital’s streets and boulevards to display their old and unidentified products at cheap prices,” says Mohsen bin Sasi, president of the national chamber of fabrics and readymade garments. “They have distorted the capital’s beauty with the dirt they leave behind them.”

This official, owner of a number of garment stores himself, can no longer tolerate this situation after the increased losses he has sustained as a result of dishonest competition by informal traders.

Mohsen claims that the illegal parallel trade has caused a decline in transactions by formal traders who pay 60 percent in taxes.

He stands in front of one of his shops, smoking one cigarette after another and angrily watches the sweeping number of street marketers who, he says, have increased significantly since the revolution.

“The government has made empty promises to find a final solution for this problem,” he said. “During the last meeting with the prime minister’s office, I was told that the problem would be resolved before the advent of Ramadan this year and that new spaces would be earmarked for the unregulated street vendors.”

Should the government fail to fulfill its promise, Mohsen says, the licensed traders would step up their protests, close their shops and stop paying taxes.

 

 

 

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