After suffering two mass casualty terrorist attacks claimed by the group Daesh earlier this year, Tunisians understandably rejoiced when four local civil society groups were awarded the Nobel Peace Prize on October 9, in recognition of their work supporting Tunisia’s transition from dictatorship to democracy.

Unfortunately, since then, things only seemed to have gotten worse for this country of 11 million people on the southern shores of the Mediterranean.

On October 12, two Tunisian soldiers were killed and four wounded in a clash with Al Qaeda linked fighters who have been active in the western Chaambi Mountain region for several years.

After claiming responsibility for the attack on the security forces, Katibat Uqba Ibn Nafi (KUIN) added in a communiqué that it had also executed one local shepherd and several other Tunisians from the nearby town of Gassrine, an economically deprived border town.

Of course, all of this adds up to what Daesh was probably hoping for when it sent its own Tunisian operatives—trained just across the eastern border in Libya—to attack the capital’s national museum in Bardo and the resort beaches of Sousse in March: Cascading attacks that further stress regional fault lines, done dirt cheap.

In fact, if you draw a line on the map stretching from central to west Tunisia, where insurgency, social unrest and an ongoing wave of arms and contraband smuggling radiates outwards from the border regions of Chaambi—down to the largely militia-governed, 500 kilometer Libyan border in the Southeast, the idea of a Daesh “Southern Strategy” starts to look less like fear-mongering for narrow political gain and more like a realistic scenario.

Either way, even if this ends up being far-fetched—if a fracturing of the country between the wealthier coastal areas and its increasingly depressed interior and border regions proves impossible for Daesh, Al Qaeda or any other extremist group to pull off—another terrorist operation would probably land a devastating blow for the country as a whole.

President Beji Caid Sebsi said as much in past July, letting it slip that Tunisia could become a “failed state” after another attack.

According to one report in the Italian newspaper Corriere della Sera, the Pentagon, too, is gravely concerned, considering “Tunisia a country on the brink of collapse, and therefore an easy prey for terrorists.” After the “lone wolves phase,” ISIS’s black flags could arrive soon.

“For weeks,” the daily continued, “the U.S. Government has been repeating this to the Europeans: We must rush to help Tunis. Weapons, military material, and intelligence are required.”

“The economic consequences of a new terrorist attack would be extreme,” one senior U.N. diplomat worriedly told me in Tunis recently. “Not only would it probably put a complete stop to foreign investment and discourage the last tourists from coming to Tunisia, but the state’s reaction would also mean increased security measures and more powers given to the police, with potentially huge negative consequences when it comes to legal certainty, judicial protection of economic operators and corruption.”

Economic Dislocation

According to several estimates, partially as a result of the two terror attacks this year that killed 60 people and devastated the tourism sector (which accounts for more than 10 percent of GDP and 400,000 jobs), growth may end up near zero for 2015. Far higher annual growth rates are needed just to keep ahead of population growth, much less employ the (unofficially) estimated 30 percent of the population now out of work.

Driving through southern Tunisia, and the traditional “gateways” of desert tourism in places like Douze and the beachfronts of Djerba Island, the enormity of the economic depression quickly becomes apparent: it’s hard to find a place to stay for the night.

In the entire, sprawling governate of Douze that includes some of the most cinematic oases and sand dunes, only one hotel remains partially open. In Djerba, a major generator of local jobs in the south, perhaps as many as 70 percent of hotels are now closed, according to local operators and press reports.

“We have a total collapse of the tourism sector,” despaired Faten Chaabane-Ben Yahmed, a long-standing hotel owner that recently had to shut her two properties in Djerba.

“Our problems substantially increased after the revolution of January 2011. But we had to wait for two attacks, one more tragic than the other, for the main threat to be taken seriously and for security arrangements to be put in place around the tourist areas. Still, to this day, the proper protections remain absent or embryonic in some areas.”

Even though several small steps have been taken to bolster the financial state of the sector, the vast majority of hotel operators continue to find little support from banks (who hold large sums of pre-revolution debt owed by many hotels), the public administration (especially utilities who routinely cut electricity for late bill payers) or labor unions concerned about the fate of so many of their members.

“Measures to help are late, insufficient and sometimes just inappropriate,” Ben Yahmed said flatly. “They won’t be able to repair the damage to the sector.”

The Enemy Within

Despite the mounting secuirty concerns and economic woes, Tunisia’s core probem might not lie in the need to counter militants inside the country or those coming in across the borders. Both of course represent serious threats to Tunisia and wider regional security.

The main cancer that the Tunisians know well, and must be dealt with sooner than later may actually be the parallel state. It is made up of the police, who dominate the tiny Tunisian Army, some business elites deeply invested in their own particular monopolies and various home-grown mafias, especially those that rule over border smuggling in connivance with elements of the security sector.

It is a structure assiduously built over decades of a Western-backed dictatorship and one that only partially receded in the wake of the January 2011 revolution. Indeed, over the last year, the parallel state is widely perceived as having come back strong. But this time, it is vengeful, hungry and increasingly divided now that the one family rule of Ben Ali and his wife Leila Trabulsi is gone.

“There is a real conflict going on between fragments of the security apparatus that reflects itself in fragments of the business elite,” explained Sami Ben Gharbia, the founder of Tunisia’s main investigative news website,

“The problem is that this structure is too rotten to be reformed. If the terrorist threat is real —and I am one who thinks we still need an unbiased analysis of the threat—then putting more money and weapons into the hands of the police is definitely not the right answer.”

For the Americans and the Europeans, however, a widely-held desire to save the only “success story” of the Arab Uprisings (and prevent yet another potential refugee crisis point in the Mediterranean) has almost exclusively translated into an overriding focus on covering a deeply inefficient economy while training and equipping a deeply ineffective security sector.

In reality, both problems are intimately related. Without addressing the pernicious grip of the parallel state, the economy will never open up and achieve growth, nor will the security sector—that feeds off of monopolistic and illegal business activities—ever be able to protect the country from the kind of relentless, high-tech insurgency that now abounds in the Middle East.

The good news is that, when it comes to Tunisia, there is still time to avoid the well-worn mistakes of Western approaches to the broader Middle East that have so often propped up hopelessly inefficient and corrupt regimes, only to watch them fail.

The parallel state in Tunisia is actually far weaker than those in countries like Egypt, Iraq or Afghanistan. And their ability to retaliate against concrete moves towards their demise is far more limited.

At the same time, as the Nobel Committee pointed out, civil society and the foundations of democracy are much stronger in Tunisia while socio-political divisions like religion and class differences are also far less pronounced.

The question that arises then—now more than ever—is whether Tunisian democrats and outside powers can come together and agree on mechanisms to address the rot within, instead of blaming outsiders and hoping that more cash and weapons will do the trick.

Political Fears Loom

Earlier this month, after weeks of reports pointing to serious internal disputes, the dominant Nidaa Tounes party finally cracked. The party holds the presidency, the prime ministry and a plurality in Tunisia’s parliament with 85 out of 217 seats.

Almost since its birth in 2012, Nidaa’s demise as a coherent political actor was predicted by a wide array of analysts and domestic opponents. After all, it was argued, the party was founded on only two points of agreement: secular (and ex-regime) opposition to the Islamist Ennahada party that dominated government from 2012 to early 2014, and support for the octogenarian former interior minister, and president Sebsi.

When the party took the controversial decision at the beginning of this year to enter a governing coalition with Ennahada as its junior partner, disgruntlement among the rank and file quickly spilled out into the open.

This past week, however, the other, arguably more crucial source of Party unity—President Sebsi—was thrown into question when a much-publicized fight broke out at a scheduled leadership meeting, with some party members close to Secretary General Mohsen Marzouk accusing the president’s son, Hafedh Sebsi, of seeking to monopolize power.

As Newsweek Middle East went to press, the distinct possibility emerged that more than 30 elected deputies would bolt from Nidaa Tounes, making Ennahada the dominant party in Parliament with 69 seats and the future of the government and prime minister in serious doubt.

Bad Timing

The possible breakup—or at the very least weakening—of the much-lauded Islamist-Secularist governing coalition could not have come at a worse moment for Tunisia.

Youssef Cherif, a political analyst in Tunis, said: “This was supposed to be the moment when our country reaps the benefits of the Nobel Prize and starts addressing its problems, especially the economic situation which is terrible. Now, even if the government stays, there will be more voices opposing the coalition government with Ennahada, more voices for ending the consensus that has been built and more accusations in Tunisian media outlets.”

Cherif’s fears with regard to the state of the economy, are widely shared by Tunisians and outside backers like the United States and the United Nations.

In the end, a weakened government, he added, “will only further discourage investors and impede movement on vital reforms.”

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