The reality of smuggling between the professionals and the consumers
Many of the smuggled goods constitute long-action bombs.
400 tons of smuggled mortadela drown our markets every month.
The young entrepreneur between the hammer of smuggling and the nail of taxation
By Mohamed Ladib
Al Alam, No. 18170, February 17, 2000.
Smuggling is a cancer that destroys and devastates our national economy, which by definition suffers from many constraints that confine its development and prevent the achievement of positive results that would enable our country to get a good status among the developed ones. How could that take place while billions of hard money moves freely into the other side without any accountability? Who is going to stop this decline that is targeting our economy at its core and that is limiting the competitive power of our national enterprises, especially the small and medium ones which constitute more than 90 percent of them?
We will try through this survey that we have conducted in Casablanca to approach this phenomenon and pause to consider during this investigation the most important drawbacks resulting from smuggling by eliciting the opinions of professionals and citizens without ignoring the social aspect by seeking the views of those groups of members of society who lived on smuggled goods and commercial transactions. We will also attempt to reveal the most important solutions featured on the professionals’ and citizens’ “tongues themselves” that may lead to the eradication of this tumour that upsets our national economy and leads to its deterioration little by little.
Casablanca: The ALAM Office
Smuggled goods invade us without our permission
We were heading towards the market place of Derb Ghalif in Casablanca. This “trade centre,” if we can say so, means the “goods of the North” not only in the memory of Casablanca people but also its visitors. This market, which is full of customers every day and which is overcrowded during holidays and weekends, contains all types of goods, mainly smuggled goods brought from Spain in particular. There are all types of fruits juice, manufactured goods, machines, electronic and domestic electrical good, not to mention more recent inventions, especially IT software.
All such products enter our houses without permission, and without being subject to customs taxation .This makes their price relatively low in contrast to the ones for which legal and financial duties have been paid.
Customers and smuggled goods
You can see citizens here and there looking for something specific. We approached one of them. He was a very young boy who has not yet exceeded the age of 18. His name was Mohamed A. He says that he is accustomed to come to this marketplace because it provides foreign goods and products with “tempting” prices. He has taken out his walkman from his suitcase and told us that he had bought it for 600 dirham while its price far exceeds that in specialised commercial shops.
Though he is aware that the device is smuggled it really does not matter to him. What counts for him is the price and the quality. The idea of quality, according to the opinion of this young boy, is synonymous with smuggled goods as long as they are made in a European country, an idea which may be true, but not always so.
Health comes first. “Those who fear dangers are often safe”. This was the opinion of Mr Brahim, 36 years old, a functionary in one of the public administrations, who was having a walk within the market. He was reserved about buying smuggled foodstuff whose source is unknown and are not subject to the conditions of health services control as is the case with local products.
This is a natural thing. Due to this real uncertainty posed by these goods as far as health is concerned, the citizen is reluctant about buying them, especially when they are not put into refrigerators, a fact that make them biological action bombs that constitute a real threat to the health of the citizens, especially those who buy them for various reasons that all add up in the end to their weak buying power. This is what Mr Ahmed.R, 41 years old, a worker, confirms. He says that he sometimes comes to this marketplace once he manages to save some money, however small the amount is, in order to buy some types of juice, some cheese, and sometimes mortadela and tins of fish. Their prices are accessible in contrast to the national products.
The question which necessarily poses itself is the extent to which citizens are aware of the dangers of such products to their health. Do low prices constitute a satisfactory reason to buy them; especially that such a fact is due to the two following factors? The first is their lack of submission to customs procedures. The second very often relates to the expiry of the date of valid consumption making the product not fit for human consumption that then pushes dealers to sell them at any price to get rid of them.
As we have said at the beginning, smuggling effects the destruction of our national economy through unfair and misbalanced competition between national products and those imported within a legal framework. In addition to that, smuggling contributes, to a large extent, to restricting the competitive power of enterprises, particularly the medium and minor ones. That takes place through what is called “the drowning of the market.” To give our good reader an idea of that we have included in what follows the opinions of some professionals who suffer much from smuggling.
60 litres of smuggled oil with a very little price
In fact, the consumer is not aware of the danger constituted by all types of smuggled oil, whether that coming through the Algerian frontiers or through the occupied Sebta and Mellilia. The danger lies in the side-effects of such oil on the engine of the car or the lorry due to low quality that in turn is due to the fact of such acts as blending oil with other substances like water for instance. This was the announcement of the President of the National University of Petrol Stations Traders, the scientific official, who has confirmed that several of such stations, whether in the north or the south, suffer from this phenomenon and cause a lot losses estimated at hundreds of millions of dirham. He has demonstrated that the smuggling of oil is not limited to the borders with Algeria and the two occupied cities but goes beyond that into that which is brought from the Southern regions. This brings about a total decline in this trade. Therefore, he has recommended to the official authorities to do their duties to combat this decline which threatens a large number of citizens who depend on these stations, especially the manpower employed in this sector, to earn their living.
“Tens of tons of mortadela invade Morocco every month”
This is what one of the professionals in the sector of meat treatment and manufacturing has professed. He adds that unfair and misbalanced competition, which is due to the smuggling of such high amounts of meat, harms this sector at its core. “As you know, this sector employs hundreds of workers, not to mention the drawbacks arising from the marketing of these goods in unhealthy circumstances. Moreover, nobody knows about the means deployed in its marketing, something that allows them to be sold at low prices (10 dirham for each piece) when they are bought abroad for smuggling at only 5 dirham for each piece. Here we are face to face with an unfair misbalanced competition with our national product that may pay taxes up to 180 per cent. Therefore, we demand hard measures to force the hands of major smugglers, not minor ones. We also demand the reconsideration of high taxes in order to encourage investment in this sector.” He adds that if the official authorities managed to limit the phenomenon of smuggling of such goods it would be possible to create more than 30000 jobs immediately.
Finding a realistic solution is an urgent necessity.
Mr Andaloussi, a young entrepreneur, has referred to the fact that Moroccan entrepreneurs, without exception, are against smuggling for a very simple reason: It is the immediate cause of the destruction of our national economy texture. Still, it is worth-noting that the northern regions live in a disastrous situation because of the lack of economic investments, which will provide work opportunities for the inhabitants of the region in order to give up smuggling, which constitute the source of life for many of them. Therefore, it is a must to implement real alternatives to provide suitable conditions to do away with this non-healthy phenomenon.
The young entrepreneur between the hammer of smuggling and the nail of taxes and customs
Mr Moncif El Kettani, the secretary general of the Syndicate of Medium and Small Enterprises, has confirmed that smuggling does not constitute a trouble for big enterprises only, but also, and to a large extent, for medium and smaller ones. The young entrepreneur is subject to all the laws relating to the necessity of his or her paying all taxes and customs duties and the membership fees to the National Box for Social Security. This leads, logically speaking, to more expenses being naturally added to the expense of production.
Despite this, this young entrepreneur unfortunately finds himself face to face with an unfair and misbalanced competition from the smuggler who does not pay any duties and who sells his products through the “parallel economic sector” which itself does not abide by any legal conditions.
As a result of all this the young entrepreneur finds himself or herself trapped between the hammer of smuggling and the nail of taxes and customs duties and even legal constraints. What is required is equality between all sides through the application or execution of law for all people.
Mr Moncif adds that one of the reasons that makes citizens resort to the “black market” and smuggling is the hidden fear from administration. Therefore taking harsh measures against the smugglers does not add up to viable solutions and alternatives. So finding a realistic solution has become an urgent necessity. This must include giving an opportunity to capital owners in the northern regions or other ones to invest within suitable conditions through offering taxation and customs facilities and simplifying administrative procedures so that we can reactivate these regions economically. That can not be achieved except through a cumulative effort from all sides including chambers of commerce, ministries and other official bodies so as to work together to promote development in our mother country.
Restructuring northern regions
At last it is necessary to signal out that fighting smuggling should not be through “occasional campaigns” as was the case in 1996. The way out, as all have agreed, recommends the restructuring of the northern regions through the encouragement of investments and the abolishing of all obstacles that may hinder that so as to create employment posts that can supersede the income provided by smuggling for a large number of citizens, especially since we know that the major beneficiaries from all this are big smugglers who employ, each of them, more than 300 people personally, according to Mr Moncif El Kettani who has suggested to give them a real opportunity to shift activities into the legitimate realm.
All this will in one way or another lead to the rise of the competitive power of our economy to meet its targets for 2010, the date when the implementation of the GATT recommendations will start as well as the abolishing of all customs barriers will begin.
Translated by Layachi El Habbouch