By Syed M. Aslam
Mar 10 - 16, 2003



ASLAM AWAN came to Karachi in search of job way back in 1952. Despite his best efforts he was unable to find gainful employment as he had no experience and hardly any education having finished only eight grade and that too from a Urdu medium school. After year-and-half of unfruitful job search he went back home only to return in 1954. This time around he managed to find a job as a dispatch clerk with a public cooperative bank to dispatch cotton and silk yarn to upcountry. He worked there for three years until the bank closed when the government permitted the private sector to deal in cotton and silk yarn. He soon found a job as tyre salesman which involved traveling from city to city. He soon realized the importance of English understanding fully that without improving his English language skills prospects of better future would always elude him. He rose to the position of the manager and quit it in early 1960s to start a tyre import business in partnership with two others. Today his company is the leading tyre importers and sole distributors of internationally known tyres and rubber-related products as well as computer hardware and business technology, a diversification. He has been elected the chairman of Pakistan Tyre Importers and Dealers Association a number of times has also served as vice chairman of a number of Standing Committees of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). His company has also been awarded the 'Best Performance Trophy' by the FPCCI twice.

PAGE: Has the tightened border with Afghanistan helped reduce tyre smuggling?

ASLAM AWAN: No, it has made no impact on the nefarious trade. In fact, the smuggling seems to have increased in the recent years. Previously only the truck and bus tyres were being smuggled but today light truck and car tyres are being increasingly finding their way into the local markets.



PAGE: But aren't the borders sealed?

ASLAM AWAN: They are, but the stress is only on crossing of borders by humans and not goods. The nefarious trade still offers incentives to smugglers to push all types of tyres and related rubber products into the country. The high duties and taxes on tyres 35-50 per cent on truck and bus tyres and as much as 50 per cent on light truck and car tyres offers the nefarious elements to keep pushing tyres into the country. Compared to this heavy incidence of duties and taxes the overall expenses borne by smugglers is a low 15 per cent, thus offering them great financial rewards even if risky.

PAGE: Tyres were included in the negative list of Afghan Transit Trade Agreement. Hasn't that discourage the smuggling?

ASLAM AWAN: Afghanistan is a land locked country and is thereby dependent on neighbouring countries to facilitate its foreign trade. The inclusion of tyres, among with many other items having little use in Afghanistan, in the negative list of the ATT has failed to stop smuggling because smugglers have access to parallel routes. Basically there are three major routes; Pakistan, Central Asian States and Iran, the first two are not used by the smugglers. However, the nefarious elements has find it convenient to import tyres through Iranian port of Bander Abbas from where it reaches Uslam Qila and Herat in Aghanistan and ultimately finds it way into Pakistan through Chaman in Balochistan. The tyres imports to Afghanistan are primary aimed at the Pakistani market.

PAGE: How does legal imports and local manufacturing fare against smuggling?

ASLAM AWAN: In term of value, between $ 100-120 million of tyres are being smuggled into the country annually at present which is higher than even the legal imports and local manufacturing combined imports around $ 60 million and local manufacturing $ 40 million. One of the great cause of concern is that Indian tyres have been able to create a niche in the local market resulting in an unwelcomed dependency. Most of the tyres smuggled into the country come from Japan while India and Europe are the top second and third beneficiary. Smuggled tyres are thus helping fuel the growth of the Indian tyre industry.



PAGE: What can be done?

ASLAM AWAN: It is hard for the government to stop the menace through administrative actions as stricter surveillance of the border require immense human resources not to mention the related costs thereof. However, the menace can be discouraged by giving a fiscal shock to the smugglers by reducing the taxes to offset financial edge enjoyed by the smugglers. As stated above, the cost of smuggling tyres into the country is a low 15 per cent compared to duties and taxes which run as high as 50 per cent. It is imperative to reduce the duties and taxes to bring down the total incidence on tyre imports to or around 15 per cent. Otherwise, high duties and taxes would keep offering the smugglers the incentive to push tyres into the country.