Taiz  Smuggling Continues to Harm National Industry [Archives:1999/01/Governance]

January 4 1999

Local industries are the pillar of our nation’s economy. But due to the influx of foreign products legally or through smuggling, the national industry in Yemen is now in a real impasse and is exposed to bankruptcy. 
To address this problem, Emad Al-Saqqaf and Mohammed Hatem Al-Qadhi of Yemen Times Taiz Office, interviewed Mr. Mohammed Tawfeeq Abdulraheem Mutahhar, General Manager of Tawfeeq Abdulraheem Mutahar for General Trade and Transportation, one of the largest companies in Yemen. 
The firm specializing in petroleum products, was established by his father in 1961. Today, it has the biggest gas-filling station in the country. Headquartered in Taiz, it owns a fleet of 202 large tankers, which distribute gas and petrol all over the nation. 
The company also represents many other products including leading brand lubricants. 
Mohammed, following in the footsteps of his father, who is still the chairman, is already playing a decisive role in the company’s decisions. 
Excerpts of the interview: 
Q: What is in your mind the reason behind the deterioration and stumbling of some local industries? 
A: Actually, the reason is that these factories don’t have protection. The influx of the foreign products is very detrimental to the national industry. Another thing is that these businessmen don’t have needed facilities. Let me give you an example of this. We tried to establish a gas station in Aden. We installed the machines but we were shocked to find no electricity and water in that area. We went to the concerned authority but they didn’t have necessary for introducing these essentials. We were forced to buy them ourselves. This raised the expenses of the station-establishing from 20 million to 32 million, you see. 
Q: What are the consequences following the breakdown of the national industries and establishments? 
A: They are really unspeakable. Many factories and companies will close down; some have already done that. Many businessmen face problems with their bankers. In other words, they do not have the necessary facilities. They are bankrupt. 
When such factories close down, the unemployment growth rate will ride high, the price of the US dollar will witness a free rise vis-avis the Yemeni Riyal, and we will witness many other economic problems that will plague our society. 
Q: What is the stance of the government in this regard? 
A: We can’t lay the whole blame on the shoulder of the government. It is always said that there is some foreign attack on the national industries. The government has to show no leniency with smugglers, the real headache of the national economy. Stiff measures have to be imposed against this evil deed. The government has also to follow up the implementation of the laws it passes. We have been working in this business activity for around 30 years. So, if we don’t know the situation in Yemen well, we would have closed down. We have faced a lot of problems with tribesmen and bandits. Only some days back, two tankers drivers were shot down and the tanker, containing gas was lashed with bullets. We informed the local authorities, but we were told to report to the Ministry of Interior. The police reached the place and found the two drivers killed. Who did it? 
Q: Is it true that the absence of marketing management for the national products make them marginalized and thus unknown to the consumer? 
A: Marketing is very fundamental either for the local or the foreign goods. They both need it. In fact, the local one is very much in need to marketing because of the illiteracy in our society. People in Yemen have an already made feeling that any foreign product has a very high quality which is not necessarily true. I don’t agree with those who say that the deterioration of some factories is that they don’t mesh with standards of quality and promotion because this doesn’t serve the interest of the producer, particularly these days where products from all over the world are at the consumer’s hands and available everywhere; any businessman is trying to get the consumer’s satisfaction. 
Q: What is the impact of this fluctuation of business activities on your business? 
A: With regard to petrol, there is no problem. We used to face the headache of smuggling petrol. But it has stopped only in some parts in Marib due to the similar price of petrol all over the world. But we face a problem with engine lubricants and gas. The government issued a number of licenses for businessmen to establish gas stations. 
The problem is that the cylinders of these new stations are not brought from the international recognized and famous companies in Italy, Brazil and so on. Rather, they are made in some workshops in some of the neighbor countries and then smuggled to the country with the trade mark of these new gas stations. 
Q: Any last word? 
A: When the government issues licenses for businessmen for constructing factories or any other establishments, it has to consider many things. When it, for example, issues a license for constructing a biscuit factory which can cover the whole country, it should not give licenses to build similar factories. This is because this doesn’t the interest of the previous as well as the new factories. It is not also good for the government because when the two factories weaken, the taxes it levies on them get lesser and lesser.