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Cablegate: Moncef Bey: Big Screens, Small Bills

VZCZCXRO5924
PP RUEHTRO
DE RUEHTU #1135/01 2331548
ZNR UUUUU ZZH
P 211548Z AUG 07
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 3705
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0919
RUEHAS/AMEMBASSY ALGIERS PRIORITY 7514
RUEHEG/AMEMBASSY CAIRO PRIORITY 1469
RUEHLO/AMEMBASSY LONDON PRIORITY 1340
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0901
RUEHFR/AMEMBASSY PARIS PRIORITY 1814
RUEHRB/AMEMBASSY RABAT PRIORITY 8423
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0128
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4128
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 TUNIS 001135

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/MAG (HARRIS) AND EB/IPE
STATE PASS USTR (BURKHEAD) AND USAID (MCCLOUD)
USDOC FOR ITA/MAC/ONE (NATHAN MASON), ADVOCACY CTR (JAMES),
AND CLDP (TEJTEL AND MCMANUS)
USDOC PASS USPTO (ADAMS, BROWN AND MARSHALL)
CASABLANCA FOR FCS (ORTIZ)
EGYPT FOR FCS (MOEZIE)
LONDON AND PARIS FOR NEA WATCHER

E.O. 12958: N/A
TAGS: ETRD ECON EFIN KIPR TS
SUBJECT: MONCEF BEY: BIG SCREENS, SMALL BILLS


1. (SBU) SUMMARY: The central Tunis "Moncef Bey" market is
where most Tunisians go to buy affordable imported and
counterfeit electronics. From cell phones to satellite
dishes, plasma televisions to washing machines, Moncef Bey
has nearly every kind of electronic equipment, household
appliance, and even some clothing. Despite GOT efforts to
regularize such informal markets, there is little indication
Moncef Bey's days are numbered. Rumors suggest that members
of President Ben Ali's extended family are involved in
running the operation. END SUMMARY.

2. (U) Located just north of downtown Tunis, Moncef Bey
Market sells suspiciously imported and many counterfeited
products at bargain prices. When in search of household
electronics, Tunisians refer everyone to Moncef Bey. A
concrete wall surrounds a set of warehouse-like buildings
where most of the items are sold. Upon entering the market,
consumers may be asked what they are looking for by a young
man along the sidewalk and then be guided to a particular
merchant. Consumers are also able to meander throughout the
market at their leisure, with minimal to moderate haggling.
Beyond the wall surrounding the main buildings, vendors line
two perpendicular streets, selling electronics off of tables,
out of trucks, and in small stores. At the end of the far
street is a "louage" (group taxi) station and a Tunisiana
(cellular provider) store, their reputable services starkly
contrasting with the questionable business of Moncef Bey.

3. (U) Unlike at the Tunis Medina souqs, where there is a
melange of genders and ages, merchants and consumers at
Moncef Bey tend to be middle-aged men. EmbOff saw only two
women on a weekday morning at Moncef Bey, both of whom were
accompanied by men. Unlike at all-male cafes, however, the
men at Moncef Bey acted no differently toward female EmbOff
than toward male EmbOff and other male consumers. Despite
announced GOT plans to integrate illegal markets into the
official market system, no police officers were seen at or
around Moncef Bey. There is also speculation that despite
the lack of uniformed police, some merchants may be
informants for the Ministry of the Interior. Merchants and
consumers interacted with little tension and merchants were
seen to be less aggressive than at the Medina; perhaps
cognizant that their low-priced products need little
high-pressure marketing.

4. (U) Such low prices in a market that is dominated by high
tariffs suggest Moncef Bey is a traditional parallel market.
Plasma televisions range from approximately US $1540 to US
$3470 at Moncef Bey while the same products cost
approximately US $1925 to US $4620 at the local Carrefour.
Large electronics such as televisions do not appear to be
counterfeit, though many speculate that they are imported
tariff-free. On the other hand, smaller electronic devices
such as MP4s are functioning products with false labels.
MP4s labeled as Sony and Apple have identical music and video
features as each other, neither of which are the options
available on legitimate Sony or Apple products. EmbOff found
that music and videos could be played on the devices, but the
technology is not as sophisticated as a legitimate IPod or
equivalent product. Prices for a 1GB MP4 are approximately
US $20, while a 1GB MP4 at Carrefour costs about US $90.
Products were seen being transported to and from the market
in unmarked pick-up trucks.

5. (SBU) COMMENT: Although the GOT is fully aware of the
existence of Moncef Bey, it seems no one is ready to address
the fundamental corruption (from illegal imports to
counterfeit products) on which the market is based. Rumors
suggest members of President Ben Ali's extended family (on
his wife's side) are involved in running the operation, which
would help explain how the market has continued to operate
unhindered. Such unsubstantiated rumors are inherently

TUNIS 00001135 002 OF 002


difficult to prove. But the GOT was quite open in its
support for the Moncef Bey vendors when the site they
previously occupied burned down in 2000: a presidential
statement announced a series of relief measures, including
the provision of a new site for the market.

6. (SBU) COMMENT, cont'd: According to a 2002 World Bank
report, the informal economy accounts for approximately 38
percent of Tunisia's GDP. The Ministry of the Interior and
the Ministry of Commerce have announced plans to integrate
some illegal markets in Tunisia into the official market
system that would impose payment of taxes and official import
charts - part of a national strategy to combat parallel
markets. To date, there is no evidence that Moncef Bey, one
of the largest markets in Tunisia, is likely to be a part of
the initial effort. Considering these markets are the only
source of income for many families, and satisfy consumer
demand for quality electronics at reasonable prices, the
strategy will likely not be implemented there until other
employment opportunities are available and high import
tariffs are reduced. END COMMENT.
GODEC

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