Moments after the Prime Minister and his Cabinet took the decision of allowing the import of reconditioned cars and slashing its duties, the trade bodies of car and spare part manufacturers met to protest , hold press conferences and issue write-ups to wage a struggle against a decision which was consumer-friendly.

The Cabinet's decision came after appeals by the government to the manufacturers to see reason and heed to the protest of the consumers. The car manufacturers, misusing high tariff protection, were selling cars at two times the prices of similar cars in the international market.

In addition they were taking full down-payments with the bookings, thus filling up their bank accounts and giving delivery periods of sometimes up to two years. To make matters worse cars were being sold on the premium with extra payments ranging from Rs30,000-150,000.

The Cabinet though fell short in giving a clear-cut decision and formed yet another committee to make recommendations thus leaving a bureaucratic loophole which the car manufacturers may exploit to their advantage.

If the committee were to include corrupt bureaucrats, the manufacturers' work will be easy, unless the government forms a committee of the MNAs, the Senators and the members of chambers to come up with recommendations without allowing the representatives of the industry to be on the committee or being invited to be heard to derail the consumer-friendly decision.

Car prices: Just one click on the Internet will expose the car manufacturers in Pakistan. An 1,800cc Toyota Sedan made in Japan is available at $13,855 or Rs7,89,735. A 1,700cc Honda DX Sedan made in Japan can be purchased at $13,260 or Rs7,55,820. A poorer Pakistan made Toyota or Honda is sold for Rs1.3 million and is not available for up to two years.

In the case of used cars the prices are amazingly low. A 2002 model Toyota is available on the internet for $9,000 or Rs0.5 million, a 2003 Toyota for Rs0.6 million, a 2003 Toyota for 0.8 million, and a 2001 Honda Accord for Rs0.5 million.

A dealer, the other day indicated that he can supply the once popular Charade ex-Japan for as low as only Rs60,000 that is less than the price of a Honda motorcycle. These prices are for cars manufactured in Japan where the cost of setting up plants is exorbitant, labour rates are 10-20 times more than the wages paid in Pakistan. With what face the manufacturers in Pakistan then demand protection through duties.

Why can't they compete with Japan where wages are so high and utilities, petrol etc., much more costly and they have state of the art plant with huge investment on quality and manufacturing operation. The protection must end and manufacturers forced to compete, more so, when they have been doing business now for 20 years of protection.

Reconditioned cars: There is a strong convincing case to permit import of reconditioned cars at the minimum duty. The assumption that it will make Pakistan a junkyard is totally false. The country is already a junkyard today with thousands of cars dating back to 1970 still plying on the roads. Most taxis are of 1970s. Most people live with old cars of the 1970s or 1980's. They can't afford to buy a high-priced new car and thus have to live on repair of the old and obsolete cars.

Reconditioned cars of the year 2000 for example if imported with low duties will help replace the existing junk by the thousands. Similarly, the common man who can't afford to buy a new car will be able to afford a reconditioned or used car.

These cars will any case be much better in quality compared with the locally-produced poor quality cars which begin to rattle in just a few months. Many countries have adopted this approach for their people and are benefiting from such imports such as Sri Lanka, Maldives Mauritius etc.

The vending industry: A very vocal group which comes to the rescue of the manufacturers is that of the vendors operating under Papaam. They want all the concessions in the world for themselves and still demand huge protection. The governments went out of the way to allow the vending industry a zero duty import tariff on raw materials and a small duty of 5 per cent on the import of sub-components.

Most vendors operate with obsolete machines purchased from auctions abroad dating back to World War II. While the world now uses computerized machines and robots our vendors produce components on lathes in facilities which are like "juggies". They employ uneducated workforce called "Chote" to do the job. Many cheat on stealing electricity and taxes. Most do not possess any quality control labs etc.

The method of production used is based on "Jugar". Thus most of what they produce does not conform to the standards set by the original manufacturers. Yet they demand a protection of 45 per cent on the import of components by others. For the last 25 years they have enjoyed protection of enforced regressive deletion programmes which were imposed in 1980s.

The Engineering Development Board staff is on their payrolls to try and get an extension of yet another three years from the WTO. The time has come for the government to recognize reality and abandon the deletion programmes for the greater good of the nation.

The world is now working on the theme to buy the best quality products from the best possible sources at the best prices thus produce a quality vehicle at cheaper prices for the benefit of the end-user. That is the only way forward unless Pakistan wants to live in the past.

Car manufacturers should, therefore, be allowed to get out of the damaging deletion programmes and source components of quality from international markets at reduced prices and thus be able to reduce the prices of the cars. There is no point in becoming a part of the WTO and now Safta, and still say we will not follow the requirements to protect the vested interest.

The way forward: The need is to implement the decisions of the Cabinet in good faith for the benefit of the common man. This will be possible only if the committee to be formed is made of peoples representative and not the bureaucrats.

The need is to end all protection by drastically slashing the duties on import of new and used cars. All the cries of the special interest that "save the industry, save employment" should just be brushed aside in the larger interest of the 140 million people.

The world is for open economy where the people come first who are supposed to enjoy the benefits of competitive prices as against paying their earning to the cartels.