In Yemen, there are no clear statistics of commercial imitation phenomenon but government or private sector don't agree about the same percentage of commercial fraud regardless of the large volume of commercial imitation here.
Officials from Ministry of Industry and Trade said that there is no statistics of commercial adulteration and fraud but they confirmed that the volume of commercial imitation forms more than 40 percent of the volume of trade in Yemen.
The private sector expects the volume of commercial imitation in Yemen is more than 50 percent or more than it according to sources from Sana'a Chamber of Commerce and industry.
The volume of commercial fraud in the Gulf countries amounted to $ 7 billion a year, $ 4 billion of them in the Saudi market.
The World Health Organization's estimated trade volume of fake and counterfeit medicines to $32 billion, this figure will increase to $75 billion by 2010.
The volume of commercial imitation and counterfeiting globally represent 7-10 percent of the volume of world trade, which equal $780 billion annually. In the Arab countries is estimated at about $50 billion.
The phenomenon of commercial fraud is a global phenomenon that exacerbates continuously and moves quickly from one place to another and from one State to another including all the goods and products by a variety of ways and developed methods which constantly renewed said Dr. Mohammed al-Hawri, Deputy Minister of Planning and International cooperation said.
Al-Hawri mentioned the reasons of counterfeiting of trademark especially the famous brands as following: the weakness of governmental bodies related to control markets responsibility because the free market policy needs effective control as well as focusing of observing activities on main cities such as Sana'a and Aden enabling fake products to enter Yemeni market easily, low consumption awareness of the fake goods and its negative effects, the decline of average per capita income in Yemen, where many of the studies demonstrated that about 31 percent of Yemenis living below the poverty line which lead to the weakness of purchasing power led to Yemenis to buy ( cheaper )fake goods, the weakness of the quality of some national industries due to the protective policies before reunification of Yemen and inferiority complex or foreign node which contribute to preferring Yemeni consumer to foreign products regardless of its quality which give an incentive to increase imports, both ways official or through smuggling, the absence of the role of Specifications and Standards body led to the lack of incentive to develop local production which contributed significantly to the weakness of local product to compete with foreign products, the lack of the legal aspect, whether in terms of legislation and laws for the punishment of fraud, or commercial imitation, the absence of the media, both in raising awareness about the risks and dangers of fake goods or defamation of traffickers and corruption.
In terms of the negative effects of commercial imitation on individuals and society, al-Hawri stated that there is no doubt that the individual is the first injured as a result of consumption of counterfeit and fake goods. These negative effects include health effects, financial implications, and increase the financial gap among people. He explained the health effects, saying the statistics showed increase rate of disease as well as traveling of thousands of Yemenis to abroad for healing.
Financial implications appeared through the financial losses resulting from damage to fake and counterfeit goods such as electrical equipments such TV's and, spare parts, he said.
Al-Hawri said that the growing of inequality in the distribution of income as a result of illicit enrichment for smugglers and practitioners of fraud, which help increasing of social problems.
In terms of the negative effects of the phenomenon of commercial fraud on investment and the national economy, al-Hawri mentioned them as following: the process of commercial fraud for common brands either locally or internationally will lead to dislocation the reputation of national products or goods which imported by validated agents. This imitation will lead to the weakening of confidence of people on those goods as a result of the decline in the quality of counterfeit goods, and hence reduced demand for goods bearing whether marks, or counterfeit goods. This imitation causes great damage to domestic production and legal trade.
Domestic production affected negatively through decrease production of fake products which several factories witnessed clearance due to the high cost of production across the cheapness of fake goods.
"Commercial fraud and counterfeiting of trade marks is one of the most essential obstacles that face increasing of foreign investments and the return of migrating national funds regardless of the privileges and facilities granted to comers investors to Yemen," al-Hawri said.
Al-Hawri talked about the risks of the weakness of the protection mechanism of the products from piracy and counterfeiting saying that the weakness of the protection mechanism will lead to increase of smuggling and the activity of dumping of fake and smuggled goods. In this case, the investment environment will be affected negatively which studies and statistics showed that around 15 percent of registered and licensed projects just implemented. This means the continuation of economic recession and thereby reduces the flows of foreign capital towards Yemen as well as the escape of capital abroad and the exacerbation of the problem of financing in the economy, according to al-Hawri.
Al-Hawri continued talking of the negative effects of commercial imitation saying that the deterioration of the levels of domestic production, the closure of factories and decrease rates of investment growth will undoubtedly contribute to the decline levels of operation and the inability to absorb new labor force to the economy which aggravates the rate of unemployment.
"No doubt" al-Hawri said that the presence of the phenomenon of commercial fraud and counterfeiting of trademarks will lead to the abuse of intellectual property rights. Consequently, joining Yemen the World Trade Organization (WTO) will be affected negatively, in particular, Yemen is keen to join WTO.
Professor Mohammed al-Maitami, economist at Sana'a University said commercial imitation is existed to produce countrified or fake products is international phenomenon and people who practice this business are criminals according to either local laws or international laws. Thus, World Trade Organization (WTO) is keen to reserve the rights of intellectual property. Commercial imitation is illegal business which affect negatively on legal business and international relations because Yemen validated on laws of WTO which ban illegal business. Al-Maitami didn't exaggerate when he talked about the loss of national economy including economic, healthy, and social affects which need drastic overcome.
In terms of the responsibility of combating this phenomenon, al-Maitami stressed saying the national interest require collecting the efforts of governmental bodies, private sector and community to tackle fake and counterfeit products.
The economy will be deformed and several companies will be closed due to the practice of commercial imitation activities, al- Maitami said.
In terms of the role of Yemen Association for consumer protection, in confronting of commercial fraud and counterfeiting, Mahmud al-Naqib said that the association coordinated with the relevant bodies, especially Yemeni Standardization and quality control to detect many of commercial fraud and counterfeiting during the follow-up and field campaigns for analyzing of goods and products.
Al-Naqib said that the association organized many awareness-raising activities, either through seminars, television and Radio or local newspapers and magazines. The outcomes of these workshops and seminars were proposals and recommendations seek to support the regulatory agencies and to activate its role and publishing of legislation for combating of this phenomenon.
The association took part in preparing of consumer protection law to cover the deficiencies in the general laws in combating of commercial imitation, al-Naqib said.
By Faisal Darem
© Yemen Observer 2009
