REMADA, Tunisia (Reuters) - Tunisian Zubair Abdel-Moula lost his work selling smuggled fuel on the streets of a poor southern town after the government tightened controls with Libya to stop militants crossing the 460km (286 miles) border.

A view shows a truck loaded with empty fuel containers at the edge of Remada town south Tunisia, October 12, 2018. Picture taken October 12, 2018. REUTERS/Zoubeir Souissi

The 32-year-old, who has never had a full-time job, now sits on a mattress blocking traffic in Remada’s main street with other unemployed protestors, demanding state jobs and aid.

Tunisia started digging trenches and setting up monitoring systems provided by Western allies on the Libyan border in 2015.

Routes that had been used for decades to smuggle cheap fuel, pasta and wheat from Libya to Tunisia, were also being used by Islamic militants and to transport drugs and arms.

Officials say shutting the routes has helped prevent a repeat of attacks such as the one in 2015 when a Libyan-trained Tunisian shot dead dozens of tourists on a Tunisian beach.

But the crackdown took the livelihood of thousands, many of whom have joined the protests. The growing dissent is a worry for the government, the ninth since the Arab Spring and the 2011 fall of leader Zine El-Abidine Ben Ali, as it clings to power.

“We won’t go,” said Abdel-Moula. “I don’t hope of things getting better.”

Southern Tunisia sits on the oil and phosphate that drive the overall economy but the good jobs in those sectors rarely go to locals who often lack engineering skills. The area around Remada is poorer than the capital Tunis, 600 km to the north.

“The south provides everything for Tunisia. There are foreign companies making money here but we locals can’t get jobs at oilfields.” said Abdel-Moula.

Fellow protestor Abdullah used to spend his nights in remote borderlands buying fuel from Libyan truck drivers to sell in Remada. Due to subsidies, the pump price of petrol in Libya is ten times cheaper than in Tunisia.

With the crackdown, the work has become too dangerous.

“I used to have a fuel (distribution) station with seven other families to buy (Libyan) fuel but it has become too dangerous,” said Abdullah, asking not to use his full name.

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UNEMPLOYMENT

Western countries have praised Tunisia as the only democratic success of the Arab Spring. It transitioned to democracy after toppling long-serving leader Ben-Ali without triggering widespread violence or civil war.

It has held free elections and in 2014 approved a constitution guaranteeing fundamental rights in contrast to autocratic systems and turmoil elsewhere in region.

But the succession of governments since Ben Ali’s overthrow has been unable to resolve deep-rooted economic problems. Prime Minister Youssef Chahed is fighting for survival with his coalition locked in a row about how to reform the economy.

Investors have been scared away from North Africa by turmoil in Libya, inflation hit 7.4 percent in September, the highest since 1990, and the jobless rate is 15 percent.

In the southern province of Tataouine, which includes Remada and much of the Libyan border, unemployment is 32 percent.

“We have a problem with unemployment,” said Governor Adel Ouerghi. “Most of our youth want to work (on oilfields) in the desert because salaries are high there.”

Many Tunisians used to cross the border to work in Libya but now feel the country is too dangerous.

“If the situation was stable 300,000 to 400,000 could find work there,” he said.

Tunisia tolerated the smuggling for decades as a way to help the south which missed out on industries concentrated mostly in the north and eastern coast.

Some 3,000 Tunisians have joined Islamic State and other extremists in Libya, Syria and Iraq, many of which came from the south or equally neglected central hinterland.

But the chaos in Libya led to a spike in arrivals of militants, drugs and weapons, diplomats say, forcing the government to act.

Libya’s state oil firm, NOC, was also keen for a crackdown. It estimates the smuggling cost the economy at least $750 million each year.

“We think most of the fuel goes to Tunisia and to Europe via Malta,” NOC said in a statement. “Some local economies have become oriented around smuggling and this affects the fabric of communities who become dependent on criminal activity.”

The smuggling has also caused fuel shortages in some Libyan towns, officials say.

“It has been also agreed with other towns and tribes to disassociate all those involved in smuggling,” said Mustafa al-Barouni, mayor of Zintan, a western Libyan town.

ESCALATION

Tunisian officials say it will be impossible to stop smuggling completely.

The border can’t be sealed in mountain regions and some Tunisian guards, often related to smugglers, look the other way for a bribe, residents say.

Fuel stalls seen by Reuters on the road between Remada and the provincial capital Tataouine were abandoned but some youths were still selling gasoline, even on the same street as the governor’s office.

But for the protesters too many people have lost their livelihood.

“Thousands of families depend on this,” said Salem Bounhas, secretary general of the powerful labor union UGTT in Tataouine.

The protestors have threatened to escalate road blocks to cut off access to oil refineries unless the government finds them other work.

The government has focused too much on closing borders without dealing with unemployment, said Chloe Teevan, a North Africa researcher at the European Council on Foreign Relations.

“Such policies are contributing to the rising disillusionment that has followed the revolution.”