Smoking and Development

Stephen DeAngelis

March 18, 2008

One of the subjects I have repeatedly written about in this blog is healthcare in developing countries and how important it is to have a healthy population in order to attract FDI. These blogs have dealt primarily with diseases like AIDS, malaria, worm infestations, polio and the like. An article in The Economist turned the spotlight on another health challenge that is basically self-inflicted — the use of tobacco [“How to save a billion lives,” 9 February 2008]. The article begins with the briefest of histories about tobacco’s spread.

“Even more than tempting liquors like tequila, tobacco is a pleasure that the Old World wishes it had never taken from the New. In 1492, when Christopher Columbus was met by tribesmen with ‘fruit, wooden spears and certain dried leaves which gave off a distinct fragrance,’ he threw the last gift away. But his shipmates brought home the custom of sucking in the smoke, and the taste spread so rapidly that in 1604 King James I of England was prompted to issue a denunciation of the ‘manifold abuses of this vile custome.’ Vile indeed, but habit-forming and therefore lethally dangerous: it cuts short the lives of between a third and half of its practitioners. According to the World Health Organisation (WHO), perhaps 100m people died prematurely during the 20th century as a result of tobacco, making it the leading preventable cause of death and one of the top killers overall. Another 1 billion more may die from it in this century if current trends continue unchecked.”

Those deaths, of course, would not all be concentrated in developing countries; but, a good number would be. With the healthcare experiences (and expenses) that companies have had in developed countries relating to smokers, they are likely to cast a jaundiced eye on emerging market countries where a significant percentage of the workforce smokes. As a result of healthcare concerns over secondhand smoke, smokers in many developed countries suffer the indignity of trying to find a public place in which they can indulge their habit.

“In recent years smoking has been sharply restricted in some unlikely places. In 2004 Ireland amazed the world by successfully imposing a tobacco ban on all workplaces; and at the start of this year, France’s café culture suddenly went smoke-free. The draconian curbs introduced by California in 1998 have been followed, at least in part, by well over half America’s states.”

According to the article, the story is quite different in the developing world.

“The number of smokers in China, India and other developing countries is continuing to grow, as addiction spreads faster than information. Hence the determination of almost everybody involved in global public health to escalate the war on smoking. Over 150 countries have already ratified the Framework Convention on Tobacco Control, which requires countries to take a range of anti-smoking measures. Last July negotiators agreed on international norms for banning smoking in public places. [And they recently met] in Geneva to discuss a protocol on tobacco smuggling. In addition to new international rules, the WHO is pushing for aggressive policies at the national and local levels. … Margaret Chan, the WHO‘s director-general, and Michael Bloomberg, New York’s zealously anti-smoking mayor, … unveil[ed] the most comprehensive survey of tobacco use ever carried out. … Tom Frieden, the city’s health commissioner, notes that the mayor’s efforts have reduced smoking among the adults in New York by 20% and among teenagers in public schools by 50%. Mr Bloomberg’s private charity, which supports many anti-smoking efforts worldwide, also funded the global survey, known as MPOWER. The study is ‘a call to action to avoid a public-health catastrophe,’ says Douglas Bettcher, head of the Tobacco Free Initiative at the WHO. The report lists the anti-smoking efforts of countries worldwide, offering benchmarks for aspiring reformers. What the survey shows, says Dr Bettcher, is that most countries have yet to implement even those policies that are proven to work.”

It has to be frustrating for those working in the healthcare field in developing countries to see progress being made in the fights against malaria, polio, and the like, only to see many of those advances offset by health challenges created by the increased use of tobacco. In order to reverse current trends, the article notes that WHO has proposed a course of action.

“The WHO says countries must do six related things. The first is to improve the quality of data on tobacco use. The second is to impose sweeping Irish-style smoking bans; only 5% of the global population is now covered by such curbs. The third is to intensify efforts to induce and assist smokers to drop the habit. Only nine countries offer the kind of well-funded, accessible programmes of which the WHO approves. Those ideas concern the existing users of tobacco; another three are aimed at persuading people not to light up in the first place. It may be hard to believe, but the WHO insists that most smokers still do not understand the full extent of the health risks. It wants all countries to mandate large, grotesque pictorial warnings on cigarette packets. Another policy proven to work (in the handful of countries, representing 5% of the world’s population, to have tried it) is a complete ban on marketing. The agency is adamant that ‘partial bans on tobacco advertising, promotion and sponsorship do not work.’ The final prescription offered by the WHO is also the most powerful one: higher taxes. Studies show that raising tobacco taxes by a tenth may cause a 4% drop in consumption in rich countries and an 8% drop in poor ones, with tax revenue rising despite lower sales. The agency wants a 70% increase in the retail price of tobacco, which it says could prevent up to a quarter of all tobacco-related deaths worldwide. The claim is that higher taxes not only bring in revenue to fund anti-smoking efforts; they actually benefit the poor.”

The reasons that proponents insist high “vice” taxes are good for the poor are interesting. On the face of it, high taxes on goods used by the poor (including tobacco) simply make them poorer in the short term. Proponents look at the long term effects of high taxes.

“A forthcoming paper by two scholars (Jonathan Gruber of the Massachusetts Institute of Technology and Botond Koszegi of the University of California) notes that smokers face a familiar choice between short-term pleasure and a long-term desire to quit. Tobacco taxes are an incentive to make the right choice, and because the poor are price-sensitive, they benefit the most. Indeed, the authors calculate that in the United States, ‘the monetary value of the health damage from a pack of cigarettes is over $35 for the average smoker, implying both that optimal taxes should be very large and that cigarette taxes are likely progressive.'”

International anti-smoking activists, the article asserts, believe they are in a frantic race with tobacco companies that are trying to get smokers habituated before governments can enact regulations. According to The Economist, tobacco companies are pressing hard.

“In recent years, as rich countries have clamped down on smoking, tobacco firms have shifted their focus to poorer places. A study by Britain’s Bath University found that by using aggressive tactics, such as targeting women, international tobacco firms had helped to double smoking rates in Russia since 1991. The tobacco industry is regrouping in order to focus on ‘promising’ markets and escape the pesky lawsuits it is likely to face in rich, litigious countries. For example, Altria, a global tobacco concern based in the United States, plans to spin off Philip Morris International as a stand-alone foreign entity in late March. China is now home to more than a quarter of the world’s smokers; it will soon be manufacturing Marlboro cigarettes for Philip Morris, and the firm will be exporting Chinese tobacco to other countries.”

The activists would like to press just as hard, but they are funded no where near as well as the tobacco companies. It’s a bit like sending in a rookie league baseball team to play against the Boston Red Sox. Maybe a baseball analogy wasn’t a good idea seeing how many baseball players still pack an unseemly wad of tobacco in their cheeks. Activists, however, see the spread of tobacco as a disease and they want to eradicate it like small pox.

“At times, the strategy used by public-health campaigners may seem heavy-handed; they retort that nothing else can work against a rich adversary. Indeed, Dr Bettcher argues that just as mosquitoes convey malaria, Big Tobacco is the ‘vector spreading this epidemic.’ And eradicating tobacco may prove every bit as hard as fighting insect-borne disease.”

Until politicians recognize that the economic health of the countries over which they have stewardship rests in large measure on the physical health of the populace, progress against all types of health issues will remain a challenge. Tobacco is a particularly frustrating challenge because its use is voluntarily and decreasing its health effects depends on obtaining the cooperation of the user or potential user.