The Maghreb’s Peripheral Centers in Permanent Crisis

When it comes to trade, there are two North Africas.

Most accounts of North Africa’s economic centers focus on the region’s capital cities, Tunis, Cairo or Algiers, or its large port cities, Port Said and Bizerte. The trade through these centers largely maps onto a North-South direction, one that integrates the region into global markets. But these accounts tend to miss an alternative, more subtle network of economic centers located in the region’s geographic peripheries. For as long as North Africa has had borders, it has had trade across these borders that exists outside official legal frameworks. Call it “informal cross-border trade.” Call it “smuggling.” Many in the region’s borderlands have just called it “trade.”

Borderlands like Medenine in Tunisia or the “Oriental” in Morocco, though marginalized economically and politically, have long served as vibrant centers of commerce, largely through the wholesale smuggling of consumer goods and hydrocarbons. Informal cross-border trade connects these borderlands to local, regional and global networks and supply chains, creating centers of wholesale distribution and employment for hundreds of thousands of workers. These peripheral centers of commerce have a complicated relationship with states in the region. Smuggling networks have not just been tolerated but actively regulated and structured with the involvement of political elites and governments.

Over the past decade, however, a slew of crises has fractured many existing arrangements, leading to the collapse of smuggling networks and income opportunities. The relationship between smuggling and states is entering a new phase in which states are setting out to “remake the borderlands,” with limited success.

 

Alternative Trade Routes

 

Informal trade across North Africa’s borderland regions has its own centers and hubs. There is Ben Guerdane in Tunisia and Zuwara in Libya, Tamanrasset in Algeria, Oujda in Morocco. Within these alternative trade routes, dozens of medium-sized cities have grown into long-established nodes, benefiting from their proximity to a border to establish themselves as places of commerce, finance, wholesale or storage for informal cross-border traders.

When it comes to trade links within the region, the Maghreb has been referred to as the most poorly integrated region in the world. But the goods exchanged through informal trade across its borders provide a glimpse at alternative forms of regional economic integration. While drugs and arms often get most of the attention, the vast majority of goods that move across these routes are far more mundane, including everything from eggs to Hello Kitty backpacks to tea and microwaves. Until recently, gasoline from Libya and Algeria dominated informal cross-border trade. In 2013, approximately one-quarter of the gasoline consumed in Tunisia was estimated to have been smuggled in from one of its hydrocarbon-rich neighbors.[1] Moreover, tracing the informal movement of goods reveals that North Africa’s peripheral centers are not just regionally integrated. They are connected to global value chains that reach from the free trade zones in the Gulf to production centers in China. For global producers, these trade routes have presented a way to get their goods into North African markets, bypassing customs and domestic monopolies.[2]

Informal trade has substantially shaped life in the region’s borderlands. In many regions, it has dominated local labor markets, offering easily accessible employment in times of high youth unemployment. It has also offered opportunities for wealth accumulation for larger traders and financers. Yet it has also brought high economic inequality and little knock-on development. Larger traders typically diversify their resources by buying real estate and lavish cafes, either locally or in the countries’ capitals. Production and formal employment opportunities, meanwhile, have remained limited and trade booms have moved labor out of agriculture. Through the decades, the people who live in North Africa’s peripheral centers and their surrounding borderlands have become highly economically dependent on trade—a fact that fundamentally shapes their relationship with their respective states.

 

Stability and Crisis

 

Due to their relationship with smuggling and their proximity to the border, peripheral centers are easy targets for a recycled Ibn Khaldunian narrative that pits the periphery against the central state: If not kept in close check, the periphery threatens to undermine or destabilize the state. This narrative has proven productive for political elites, helping them to justify centralized power and to court foreign funding for security infrastructure.

While cross-border movements have, at times, presented real security challenges, for decades, their smuggling economies have also served as an arguably stabilizing feature of the region’s political and economic structure. They provided employment in regions that were largely ignored in the economic plans of post-independence political elites and gave a wider population access to affordable goods. While cross-border movements have, at times, presented real security challenges, for decades, their smuggling economies have also served as an arguably stabilizing feature of the region’s political and economic structure. Moreover, informal trade did not always occur beneath the radar of the region’s states. States and political elites have frequently been complicit in the regulation of the smuggling economy.[3] Regulations—from informal deals providing access to certain routes, to explicit rules of what can be smuggled through a border crossing and at what price—have benefited political elites in the center. They have allowed dictators from Muammar al-Qaddafi in Libya to Zine El Abidine Ben Ali in Tunisia to strategically insert political allies into profitable positions in smuggling networks or protect their businesses from informal competition.

The smuggling economy has also given the state a convenient rationale for securitizing the region’s borderlands. While the opportunities for income generation among otherwise economically marginalized groups is likely the most significant political function of smuggling economies, elite interests have been crucial to maintaining their development. Local elites, political entrepreneurs, traders and civil society activists have all sought to shape, transform or take advantage of the relationship between peripheral centers and the region’s states—though not always with similar goals. Local trade councils, for example, might have a different perspective on what development in the borderlands should look like than youth organizations. Meanwhile, traditional leaders look with skepticism at the political machinations of those made rich by the smuggling booms.

In the past decade, international civil society and development organizations have become active in the region’s borderlands. Some, like the Danish Demining Group or International Alert in Southern Tunisia, have focused on borderland perspectives on security, accountability and livelihoods. Other organizations, such as the International Organization for Migration, have focused on migration through and from these borderlands, especially in Libya and Northern Morocco.

But the existing mode through which North Africa’s borderlands were integrated into the region’s political economy is growing increasingly untenable. A series of crises has had substantial impacts on the region’s smuggling economies. The civil war in Libya and the expanded presence of armed groups in some border regions, geopolitical tensions within the region, the European concern over migration and related investment in border infrastructure, the Covid-19 pandemic and ongoing economic crises have all worked to undermine the global value chains in which informal trade networks were embedded. Amid these crises, the region has experienced a massive expansion of border infrastructure. New border walls, fencing and ditches and increasingly sophisticated electronic surveillance equipment has disproportionately hit smaller and more localized smuggling networks.

As a consequence, critical sources of income have diminished in many borderlands across the region. While the timing and extent of these crises have not been homogeneous—North-Eastern Morocco, for example, began feeling these effects some years earlier due to an expansion of border fortifications—the wider patterns are visible across the region. Unemployment in many borderlands has increased, as has petty crime. Outward migration from these peripheral centers, both towards domestic urban centers and towards Europe, is one of the main ways younger workers in particular are coping with changes.

 

Remaking the Borderlands

 

Changes in recent years highlight the fragility that has always undergirded the relationship between peripheral centers and North Africa’s states. Beneath the talk of unruliness and subversion was a dependency on decisions made far away from the borderlands. A number of factors suggest the current crisis in these peripheral centers will outlast the effects of Covid or the current cost of living crisis.

For one, many recent changes are structural. Infrastructure that has been built up around borders, both physical and in terms of personnel, is unlikely to disappear. Elites in the national capitals have started to adapt and diversify their incomes. Some now own formal gas stations, others wedding spaces or cafes in the fancier suburbs of Tunis. As a result, they are growing less dependent on maintaining labor-intensive smuggling practices in the borderlands. Meanwhile, the impact that years of hardship have had on livelihoods and opportunities for young people is deep and difficult to reverse. As their savings have depleted, many lack both the opportunities and capital to start anew locally and will look for work elsewhere. As the region’s smuggling economies enter an increasingly permanent state of crisis, a paradigm of “remaking the borderlands” is likely to take over: with state investment and new development projects designed to replace the smuggling economy’s role in local livelihoods. Recent years have already seen some indications of this approach. Morocco, for example, has established new development plans for Oujda and Nador—two cities hit hard by the collapse of informal trade across the border with Algeria and with the Spanish enclave of Melilla.

There is reason to welcome a search for economic alternatives for the region’s borderlands. The smuggling economy provided incomes, but it also created deep dependencies and vulnerabilities. Even if it was somewhat regulated, it still contained a risk of violence, harm and indignity. Alternative development models are a common demand of borderland communities. But so far, attempts to establish economic alternatives are raising serious doubts about the success of providing alternative livelihoods. Some initiatives focused on building free trade zones and special economic zones across the region have yet to show that they can generate the kind of large-scale employment and low barriers to entry that smuggling economies did. Other projects, built around setting up agricultural cooperatives in the borderlands, have struggled to be economically viable and to generate genuine buy-in especially among younger former smugglers.

A key difficulty is the scope of the challenge. Re-developing the region’s borderlands means addressing decades of sustained and deep state neglect—a project that will require substantive infrastructure development, political cross-border cooperation and an investment strategy that is holistic, sustained and not subsumed in the economic interests of the center.  This task is unlikely to be tackled with the seriousness and scope it deserves in a time of budgetary anxieties across the region. In the context of highly centralized states and an international community that views them primarily through a security and migration lens, peripheral centers have struggled to find a lobby or build up united coalitions for such demands.

In the absence of alternatives that are effective at scale, North Africa’s borderlands will likely enter a phase of permanent crisis—one that will continue to be marked by high unemployment and outward migration, ongoing low-level protest and a cross-border economy increasingly dominated by trade in illicit goods. In terms of their political role, peripheral centers are likely to remain a space in which both real and imagined anxieties around the intersection of poverty, mobility, radicalization and illegality play out. In this sense, they will continue to serve one of their key political functions to the region’s states: providing a narrative justification for centralization and securitization. As informal borderland economies lose their economic footing, North Africa’s economies will likely be further centralized. With the old order in a state of permanent crisis, whether the center can hold will depend on its ability to re-fashion an equitable role for its peripheries.

 

[Max Gallien is a political scientist at the Institute of Development Studies and University of Sussex.]

 

This article appears in MER issue 305 “Peripheries and Borderlands.”

 

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Endnotes

 

[1] Ayadi et. al, “Estimating informal trade across Tunisia’s land borders,” World Bank, no. WPS6731 (2013), p. 7.

[2] Adeel Malik and Max Gallien, “Border Economies of the Middle East: Why Do They Matter for Political Economy?,” Review of International Political Economy 27/ 3 (May 2020).

[3] Max Gallien, “Informal Institutions and the Regulation of Smuggling in North Africa,” Perspectives on Politics 18/2 (June 2020).