Tobacco industry still calls the shots

By R.A.I. Warmenhoven

JAKARTA (JP): Despite the political changes in the country, a coalition of cigarette companies and the Presidential Palace have overturned Indonesia's first antismoking legislation.

While it seems there will be no return to the old days of the New Order regime of president Soeharto and his sycophants, this does not mean the old forces are not fighting back.

Sometimes the Presidential Palace even supports them. In particular when there is money involved, according to some analysts. And there is one troubling area in which the old and new forces have been particularly successful: tobacco control policies.

Last month President Abdurrahman Wahid overturned the courageous decision by his predecessor, interim president B.J. Habibie, to introduce the first tobacco control laws in Indonesia.

Indonesia is around 30 years behind neighboring countries such as Singapore, Thailand and Malaysia in limiting the freedom of the tobacco industry. Using its power, the kretek (clove- flavored) cigarette companies, which control almost 90 percent of the cigarette market in Indonesia, were able to convince advisers in the palace to overturn the presidential decree promulgated during Habibie's last days in power.

The kretek companies were so confident Indonesia would remain what is probably the least regulated cigarette market in the world, they never even bothered to comply with the regulations contained in the decree.

These included a ban on television advertising, the introduction of health warnings on cigarette packs and the lowering of excessively high levels of tar and nicotine levels in kretek cigarettes.

Indonesia is probably the only country in the world where the local cigarette industry is still so powerful and so well- connected -- President Abdurrahman was the guest speaker at a recent industry conference -- that it is able to block measures that decades ago became standard in the rest of the world.

As a result, Indonesia has no bans on television advertising, no public information campaigns on the health risks associated with smoking, virtually no smoke free areas and local cigarettes have by far the highest levels of tar and nicotine levels in the world.

On top of this the excise system is designed by and for the benefit of the industry, and there are no government campaigns to prevent underage smoking.

This is important because "70 percent of smokers in Indonesia take up the habit before they have turned 14", says Muhaimin Moefti, chairman of Gaprindo, one of Indonesia's cigarette manufacturing associations. Thanks to a total lack of regulations, Indonesia is the fastest growing cigarette market in the world. The Indonesian cigarette industry, concentrated in East Java, is a spectacular success story. Since 1980 the production volume of the powerful local cigarette manufacturers has tripled.

At the same time volume in developed countries like the United Kingdom, the United States and Singapore has fallen substantially. More than 40 percent of all Americans smoked in 1964. Since then the number has almost halved to 21 percent.

In contrast, more than 70 percent of the Indonesian male population and just under 5 percent of the female population smoke. This means that over 60 million Indonesians smoke. Most of these smokers earn less than US$1 a day. "These poor people are spending 30 percent to 40 percent of their income on cigarettes," estimates Sampurno of the Ministry of Health.

State Minister of the Empowerment of Women Khofifah Indar Parawansa has called on mothers of poor families not to buy cigarettes for their husbands. "Instead they should spend the money on meat and eggs, to ensure their children do not suffer from malnutrition," she said.

According to a recent report by the World Health Organization, one in two regular smokers will die as result of the habit. Already three of the top five causes of death in Indonesia are related to smoking: childbirth complications, heart diseases and pneumonia. And the epidemic is just starting.

It takes an average of 20 years before smokers develop serious smoking-related illnesses. The long delay between smoking and the onset of serious smoking-related illnesses has most likely confused the Indonesian government, which has simply never studied the relationship between smoking and mortality.

The tobacco industry in Indonesia is the biggest taxpayer after the oil sector. The kretek companies consistently argue that any attempt to regulate them would result in a massive loss of jobs and a serious loss of revenue for the government. Advisers to the President seem sympathetic to both arguments.

The government desperately needs money to finance the economic recovery of Indonesia. And many of those employed by the kretek companies and many tobacco farmers are members of Nahdlatul Ulama, the President's political base.

However, these arguments are misleading at best.

Experience in many other countries, like South Africa under Nelson Mandela, has consistently shown that raising taxes on tobacco leads to an increase in government revenue, especially in the short run.

Successful policies to regulate the industry will only lead to a slowdown in the growth rate of tobacco consumption in Indonesia. Doomsday scenarios that regulations will result in mass layoffs are nonsense.

Furthermore, money not spent on tobacco will be spent on other goods, generating alternative employment. Economists at the World Bank concluded long ago that the economic benefits of tobacco control far exceed the costs. As a result the World Bank has had a policy of not lending money for tobacco production and for encouraging tobacco control.

There is also some good news. Change is in the air. By convincing the Presidential Palace to overturn Habibie's decree, the kretek industry may have scored a pyrrhic victory. The new decree may be a lot "milder", but the right to be informed about the risks involved with smoking has been established for Indonesian consumers.

One day even cigarette companies in Indonesia will have to print health warnings on their cigarette packs. The new decree also stipulates that direct television advertisements for cigarettes are not allowed after 9:30 p.m. Only after so-called "implementing regulations" are issued will the industry decide if it is willing to comply with these limitations.

The decree fits into a new trend among Indonesian urban consumers: they are slowly becoming more health conscious. And as a result, kretek manufacturers are suddenly promoting low tar and nicotine cigarettes. These may be small steps.

However, non-governmental organizations are convinced the process is irreversible. But it is doubtful if Indonesia will ever catch up with neighboring countries like Singapore, Malaysia and Thailand. These countries started challenging the political power of the tobacco industry in the early 1970s.

The writer is a Dutch historian from The University of Groningen, the Netherlands, who is currently doing a study of the political transition in Indonesia.