Tobacco Control and the Role of Government

1. Tobacco Control and the Role of Government Rekha Menon Senior Economist, Human Development Unit Eastern Europe and Central Asia World Bank Tashkent, Uzbekistan December 13, 2007

2. Why is Tobacco Control a Priority for Governments?

3. 1.2 billion smokers worldwide, 984 million (82%) smokers in developing countries. • Globally, 80,000 to 100,000 youths start smoking every day • Smokers often do not know the risks • Tobacco is addictive and difficult to quit

4. High disease burden…. • Second major cause of death worldwide and fourth most common risk factor for disease worldwide • 4.9 million deaths in 2000 and 56% of tobacco disease burden is in developing countries • By 2030, tobacco is expected to be the single biggest cause of death worldwide, accounting for about 10 million deaths per year

5. High economic costs often as high as 1.1% of GDP… • Premature mortality • Health care costs related to smoking induced chronic diseases (affect non-smokers as well) • Forgone earnings • Productivity loss especially for poor

6. How important an issue is tobacco control Eastern Europe and Central Asia?

7. High smoking prevalence

8. Smoking prevalence in Uzbekistan Source: Household Budget Survey, 2006 Uzbekistan

9. Heavy smokers in Uzbekistan Source: Household survey, Uzbekistan

10. Smoking starts early and is addictive Source: WHO

11. Youth are heavy smokers…

12. Higher cigarette consumption Source: World Bank estimation

13. High average consumption per smoker…. Source: World Bank staff estimates

14. Tobacco attributable deaths in Central Asia

15. Male Lung Cancer Mortality in Selected Countries Age standardized rate/100,000 Source: International Agency for Research on Cancer

16. What can Government’s do?

17. Deter children and youth from smoking • Give adults all the information they need to make an informed choice Interventions that control demand are more effective than supply side interventions

18. Higher cigarette taxes – most cost-effective measure • Non-price measures: • Increase consumer information: dissemination of research findings, warning labels, counter-advertising • Comprehensive ban on advertising and promotion • Restriction on smoking in public and work places • Cessation help (NRT)

19. Higher taxes - impact on consumption… • Cigarette taxation will reduce cigarette sales • Increasing price is the most effective means of decreasing cigarette smoking, especially among children, adolescents and young adults. • 10% price increase will decrease cigarette consumption 4% in developed countries, 8% in developing countries. • Smoking among children will fall by about twice as much. • Source: Chaloupka et al., Ch. 10 in Jha and Chaloupka, 2000

20. As taxes increase, consumption decreases

21. Impact of prices on consumption in Uzbekistan…

22. Higher taxes - impact on revenue…. • Increased taxes invariably increase government revenues. • The percentage decline in cigarette consumption is smaller than the percentage increase in price that induces it. • Further, tax is only a fraction of price, so a given tax increase will cause a far smaller decrease in cigarette sales.

23. Higher taxes - impact on the poor…. • Cigarette taxes are regressive. • A larger proportion of the poor smoke. • However, a tax increase may produce a progressive impact • because the rich decrease their smoking only slightly in response to a price increase • the poor decrease theirs substantially. [Townsend et al., BMJ, 1994]

24. Furthermore…. • Health benefit of a tax increase is distinctly progressive. • Countries can compensate in part for any tax regressivity e.g., by funding cessation services and pharmaceuticals for poor smokers.

25. Control smuggling through law enforcement… • Effective control measures of smuggling exist • Focus on large container smuggling • Prominent local language warnings and tax stamps • Increase penalties • Licensing and tracking of containers • Increase export duties or bonds • Multilateral tax increases help combat smuggling

26. Health information reduces the demand for cigarettes Source: Kenkel and Chen, 2000

27. Comprehensive advertising bans reduce cigarette consumptionConsumption trends in countries with bans vs. no bans(n=102 countries) Source: Saffer, 2000

28. Restrict smoking among youth, in public & at workplaces • Clean indoor-air laws: • can reduce cigarette consumption • can be self-enforcing • work best with social consensus against smoking • reduces negative impact of second hand smoking • Youth access restrictions: • mixed evidence of effectiveness • require aggressive reinforcement

29. Support cessation treatments • Cessation support from health professionals is key • NRTs double the effectiveness of cessation efforts • Quit lines, community support, etc., work • Governments may increase accessibility and affordability of NRTs by: • Over the counter (OTC) sales, allowing advertising, licensing • Conducting more studies on cost-effectiveness (especially in low/middle income countries) • Considering NRT subsidies for poorest smokers

30. In summary…. • Adopt a multi-pronged strategy, tailored to the country needs • Excise taxes on cigarettes to reduce consumption • Help current smokers by increasing access to cessation therapies – can be funded from tax revenues • Increase health professionals’ awareness and information, on tobacco related issues • Increase tobacco control measures, ban advertising and promotion, restrict smoking in public and work places, restrict youth access to tobacco products, etc. • Increase consumer information and tobacco control projects.

31. Main stakeholders • Ministry of Finance: Tobacco Tax Revenues • Customs Administration: Smuggling, Border Control • Ministry of Labor: Farmers and Manufacturing Labor • Ministry of Agriculture: Tobacco Production • Ministry of Education: Youth education on tobacco • Smokers: Low prices, variety and appealing products • Producers: Profit, market share, sales • Ministry of Trade: Export earnings from tobacco