Policy Wise

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

A story from China illustrates the primary problem anti-smoking campaigns face; health concerns vs. economic cost of banning smoking.

Proposals in China to ban smoking in public and raise tobacco taxes are pitting health professionals against a state-run industry that contributes more than $30 billion to the government.

The plans, which include a ban on tobacco advertising, were discussed at the annual meeting of Parliament in Beijing and prompted the deputy chief of the state tobacco monopoly to say that smoking curbs could destabilize the country.

The debate highlights the conflict between China’s pursuit of jobs and growth, and the social costs of an economy that is expanding at more than 10 percent a year.

“China is lagging behind the world,” said Fang Jiqian, a biostatistics professor at Zhongshan University in Guangzhou who put forward one of the anti- smoking proposals. “We face a budget shortage for medical services, so why don’t we take measures to control smoking?”[link]

It’s a good question but unfortunately the solution is not that simple. In almost all countries in the world, tobacco is a major money-spinner for the state and hence it is wary of taking steps which would dry up this huge source of income. Many states in America, despite all the anti-smoking rhetoric rely on tobacco dollars for their development. In New Jersey for example, the government explicitly budgets for road developmentfrom future tobacco dollars!

Developing countries present a much bigger challenge. As smoking rates fall in the West, tobacco companies have increasingly shifted their attention to developing countries like China. With new-found wealth and increasing disposable income, smoking has increased dramatically. As this story shows, anti-smoking efforts would face resistane from economic considerations.

In India, there is a peculiar problem. While government taxes on cigarretes are extremely high, in the name of the poor–bidis are not taxed! Any effort to increases taxes on bidis is resisted by the socialist empire. This is entirely counter-produtive as bidis are consumed mainly by the poor who not only suffer from poor health but also have no access to proper health facilities. Only by targetting bidi consumption can the government hope to tackle the smoking related health problems.

Finally, while multi-nationals are frequently blamed for encouraging smoking in developing countries, even state monopolies are not above reproach.

If you enjoyed this post, make sure you subscribe to my RSS feed!