No Tobacco Day
WNTD
Today is World No Tobacco Day. It was established by the World Health Organization, (WHO), in 1987 to draw global attention to the widespread use of tobacco and the negative effects on health which this has, (currently leading to millions of deaths worldwide each year). It aims to encourage a 24-hour period of abstinence from all forms of tobacco consumption across the globe.
Over the years it has met both enthusiasm and resistance from governments, public health organizations, smokers, growers, and the tobacco industry.
In one of the episodes of “ Yes, Prime Minister”, the Right Honourable Jim Hacker, MP, PM, uses the plan of his Minister of Health to eliminate smoking as a ploy to bluff the Treasury into agreeing support his plans for tax cuts.
The dilemma involves balancing the costs, (in both financial and human terms), incurred by smokers against the considerable tax revenue raised by the sale of cigarettes and other tobacco products to those smokers. It is easy to think of Anthony Jay and Jonathan Lynn as making light of serious issues, but as a satirical programme, this was just one of several situations which they used to reveal more general underlying issues of concern, such as: “who actually runs the country?
Like most of the episodes in the series, this particular plot was based firmly in the real world. It’s a difficult dilemma: measures undertaken in order to eliminate, (or at least reduce), the harmful effects that are associated with smoking tobacco, will result in lower tax revenues received by the government so they have less money to pay for all the services that they provide.
In December 2004, Bhutan took the plunge and became the world’s first non-smoking country, banning smoking in public and going one step further than Ireland, which had already done so, by also making it illegal to sell tobacco. Mind you, it was probably a little easier for Bhutan as there were relatively few smokers – less than one percent according to some estimates, so the government weren’t faced with the same dilemma.
If, however, this was a dilemma for the fictitious government of “Yes, Prime Minister”, the situation is even more marked for the real-life Kyrgyz government. Whereas British society, on which “Yes, Prime Minister” was based, is both a consumer and producer of tobacco products – several of the largest cigarette manufacturers are British owned – tobacco is also an important crop in Kyrgyz agriculture … and agriculture is a significant sector of the economy, accounting for over a third of GDP and employs 55% of the total workforce.
Due to the mountainous landscape, animal husbandry is the mainstay of the country’s agriculture, (mainly sheep, goats, cattle, and horses although yaks, chicken and even pigs are also raised). This is especially marked in terms of land use; whereas some 44% of the total land area is used as pastures for livestock, only 7.5% used for the cultivation of crops, and that is chiefly concentrated in the Ferghana, Talas and Chui valleys.
So domineering is the position occupied by pastoral agriculture that the main crops that are grown are those that can be used as fodder to feed the livestock. The second largest crop is Winter Wheat, which is followed by barley, corn and rice. Among the country’s other agricultural products are tobacco, cotton, potatoes, vegetables, grapes, fruits, and berries. Of these, the top products for export are cotton and tobacco.
Although the level of production has varied from year to year and is below the levels grown during the Soviet period, Tobacco is still an important cash crop and the major growing regions are around Osh and Jalalabad in the Fergana Valley and, to a lesser extent, the Talas oblast.
In the days of the Soviet Union, Kyrgyztamekisi, (the state owned tobacco company), would buy the crop and manufacture a range of popular brands. It is said that Josef Stalin was particular partial to cigarettes made from Kyrgyz tobacco.
For the record: In recent years the tobacco crop in Kyrgyzstan has been the subject of some controversy.
Some research carried out by the International Labour Organization, (ILO), in 2001 apparently found evidence of child labour being used in Kyrgyzstan – including in the cultivation and harvesting of tobacco. A series of measures were undertaken to eliminate, (or at least reduce), it – for example by raising public awareness and providing training courses. In recent times this has become an issue in cotton production in Uzbekistan.
Then, in 2010, a Kyrgyz subsidiary of a multinational company and its parent company pleaded guilty to violations of the Foreign Corrupt Practices Act, (FCPA), admitting that bribes had been paid to government officials in connection with purchases of Kyrgyz tobacco. Although the firms were fined, because they had cooperated with the investigation the penalties were not as harsh as they might have been.
Tobacco also represents one of the largest examples of FDI, (Foreign Direct Investment), in the republic – through the Reemtsma Cigarette factory in Bishkek.
During an official visit to Germany in 1996, representatives of Kyrgyztamekisi approached the German cigarette manufacturer Reemtsma with a view to creating a new joint venture which would include the construction of a new factory. Over the next year and a half, improvements to the existing facilities were made whilst the new factory was being built and new product lines were introduced. Production rose dramatically and some products were exported throughout the region.
The parent company was bought up by the British conglomerate Imperial Tobacco in 2002, and is now part of one of the world’s largest tobacco corporations; the Bishkek factory being one of 50, employing over 38000, people around the world.
Although it uses Kyrgyz grown tobacco in its cigarettes, Reemtsma does not actually purchase tobacco direct from the country’s growers. To maintain consistent and uniform standards of quality across all the factories producing a particular brand, they use a blend of tobacco which should be the same used on each production line. Instead, farmers sell their crop to specialist firms, such as the one that confessed to its employees paying bribes to local officials in order to be able to do business in the country. The crop is then shipped to central storehouses where the blending takes place.
Although the company is able to export production throughout the region, there are other factories located in neighbouring countries, so there is lively competition for business. This has led to some debate about the level and system of customs duties levied on tobacco products, both in Kyrgyzstan and our neighbours. There is a suggestion that the rates applied in the different countries make it both, easier to import and harder to export cigarettes.
It might be thought that the use of customs duties on tobacco products might be a strategy in an attempt to help control or limit tobacco consumption, (it is often proposed as one way of achieving such an aim – even in “Yes, Prime Minister”), but although Kyrgyzstan has undertaken some measures aimed at trying to do this, (control, reduce and limit consumption), (for example, printing health warning on packets, placing limits or bans on advertising and prohibiting smoking in certain places such as government buildings), the use of tarifs to raise prices doesn’t seem to be one of them. Although more expensive brands are available, a packet of twenty cigarettes can still cost as little as 16 som, (USD0.35, EUR0.25 or GBP0.22).
It seems there is still a long way to go if Kyrgyzstan is ever to be a No Tobacco country like Bhutan.
For the record: The Reemtsma company has faced other problems as well, over the years. For example, in 2009 when some of the deputies decided to draw attention to the investment agreement made when the joint venture was established, giving the company certain benefits and the investors, certain incentives. The deputies claimed that some of the terms of the agreement had not been fulfilled and the deputies suggested revising it.
Bishkek