We all know the dangers of tobacco. Bad breath, poor teeth and high blood pressure are only three of the blights you can expect if you’re one of the billion people worldwide who light up on a regular basis. But what you might not know is that every tenth cigarette smoked in the world is traded illegally.
If you’re smoking right now, this means there’s a ten-percent chance of the following: either your cigarette has been legitimately manufactured in one nation and then smuggled into yours, or it has been illegitimately manufactured, often as a counterfeit item and often in a manner that doesn’t comply with health and safety legislation.
In either case, such trade carries a host of dangers. From lost tax revenues to support for organized crime and to greater health risks, the illicit circulation of tobacco not only compounds the problems arising from nicotine and tar, but also undermines attempts by sovereign governments to pursue effective tobacco-control policies.
It’s squarely at these issues that this year’s World No Tobacco Day (#WNTD) takes aim. Rather than focus simply on encouraging smokers to take 24 hours off, which it has done every year since 1987, the World Health Organization’s annual event will also do everything it can to raise awareness of the black market in equally black tobacco.
In particular, the WHO are using May 31 to highlight how the young and the poor are likelier than any other demographic to be targeted by the illegal trade in tobacco products. Both groups are enticed by the low prices of bogus cigarettes, and in many cases the young end up with addictions that wouldn’t have arisen if legitimate tobacco alone had been available to them.
More worryingly, such cheap knockoffs and contraband make a profit for crime organizations, with predictably dire results. More interestingly, they also make a profit for the tobacco industry itself.
According to the WHO, the corporate giants comprising this industry exploit gaps and ambiguities in government legislation to sell products where they shouldn’t be sold. The Organization also asserts that such activity feeds into corruption and destabilizes good governance, especially in developing nations.
In order to counteract such deleterious effects, World No Tobacco Day is calling on academics and institutions to increase their research into the tobacco industry’s involvement in the illegal trade of its own products. It’s also calling on governments to ratify the Protocol to Eliminate Illicit Trade in Tobacco Products, which proposes an international tracking system for tobacco items and measures to facilitate relevant international cooperation.
However, as effective as global coordination on this issue might well prove, the WHO’s approach to the illicit trafficking of cigarettes is undercut by one of its own policies.
It advocates heavy taxation on tobacco, arguing that increases in price act as a deterrent against consumption. At best, this is only partially true, since any reductions in demand for taxed tobacco are offset by rises in demand for illegal tobacco. Consequently, the WHO is exacerbating the very problem it’s trying to solve via World No Tobacco Day. It’s driving the young and the poor away from legitimate tobacco, towards cheaper yet more dangerous substitutes.
Against this argument, it’s possible to cite data from, for example, a recent study funded by the Bill and Melinda Gates Foundation: “How Eliminating the Global Illicit Cigarette Trade Would Increase Tax Revenue and Save Lives.” This found that the use of illicit tobacco is in fact proportionally higher in nations where the unit price of cigarettes is lower. The implication would therefore be that higher prices do not compel people towards smuggled or bootlegged cigarettes.
Nonetheless, this and other reports didn’t calculate the average unit price in relation to average national income. This omission allows for the possibility that in such a nation as Bolivia, with a 46.2% rate of illegal tobacco consumption, the lower absolute price of a legal cigarette still constitutes a greater proportion of the average consumer’s income than the higher absolute price of a cigarette sold, by way of comparison, in the United Kingdom.
A glance at the World Bank’s World Development Indicators table for 2015 suggests this is more than a mere possibility. For low and middle income nations, gross national income (GNI) per capita is $728 and $4,754 respectively, whereas in high income nations it’s $39,812. This is approximately 54 and 8 times higher.
Yet according to the aforementioned study, the average price for a packet of 20 cigarettes in a high income nation is $4.91, which is not 54 and 8 times higher than the $1.13 and $1.89 averages for low and middle income nations. From these figures we can go on to calculate that, if the typical smoker consumes four packs every month (or 48 every year), the total he would spend on tobacco annually would be $54.24, $90.72 or $235.68. If he lived in a low income nation, an eyebrow-raising 7.45% of his yearly income would therefore be spent on cigarettes, in contrast to 1.91 or 0.59% if his nation were of middle or high income.
In other words, higher prices and taxation are indeed a cause of the illicit trade in tobacco. People in lower income nations and of lower income have to pay more for cigarettes in relation to their earnings, and as a result they turn to illegal alternatives. Increasing taxation is only going to aggravate this, which is why the WHO would do much better to concentrate on the other policies it champions in discouraging tobacco use.
Prime amongst these are education, prohibitions on advertising, the introduction of plain packaging and bans on smoking in public spaces. Such measures help to foster a climate in which smoking becomes increasingly less socially acceptable and desirable. They also don’t need to be complemented by infallible border controls, omniscient police forces and a complicated tracing system. More importantly, their success would mean that smokers will no longer be attracted to any kind of tobacco, whereas if a tax is successful in reducing legitimate tobacco sales, these same smokers still might be attracted to illegal varieties.
The Bigger Picture
But this issue intersects with a far wider range of factors than price and taxation. The trade in illegal tobacco is also a symptom of poor governance and weak institutional development, of insufficiently policed borders that can be penetrated by crooks and corrupt political systems that are no less penetrable. It’s an index of poverty and inequalities in wealth, of a globalization that introduces goods to a nation without introducing the jobs and development that will enable the people of that nation to afford these goods. Finally, it’s also a failure of education, including the failure of governments to cultivate a sense of civic duty and participation that might dissuade people from evading tax and financing crime.
Combating the illegal trade in tobacco is therefore going to require much, much more than a single day adverting us to its hazards. Nevertheless, this year’s World No Tobacco Day is a great start. As well as alerting people to the game of Russian roulette they play whenever they buy a cut-price packet of cigarettes, it will also hopefully create a pressure point that perhaps, one day, will facilitate lasting political, economic and social change. So the next time you come across a suspiciously cheap carton of lights, take a moment to consider the kind of world you want to create.
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