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Keywords:

  • development aid;
  • tobacco industry;
  • tobacco control;
  • tobacco epidemic;
  • perverse economics

Abstract

  1. Top of page
  2. Abstract
  3. Aid, tobacco trade and the making of a global epidemic
  4. Double standards
  5. Fail safe
  6. Reluctant messiahs
  7. References

L'aide étrangère par les donateurs a joué un rôle important en apportant un soulagement et le développement aux pays dans le besoin. La promotion de la culture et l'industrie du tabac à travers l'aide depuis les années 1950 a eu des retombées limitées, mais un grand impact délétère sur la santé de millions de personnes. La plupart des donateurs ont un contrôle solide du tabac en place à domicile, mais continuent à promouvoir l'industrie du tabac et évitent de soutenir la lutte antitabac. Les donateurs sont-ils coupables de leurs investissements dans la promotion du tabac?

La ayuda por donaciones extranjeras ha jugado un papel significativo a la hora de aportar alivio y desarrollo a países necesitados. El promover el cultivo de tabaco y la industria tabacalera ha tenido beneficios limitados desde los años 1950s, pero ha tenido un gran impacto negativo sobre la salud de millones. La mayoría de los donantes ejercen un fuerte control del tabaco en su país de origen, y sin embargo continúan promoviendo la industria tabacalera y evitan apoyar el control del tabaco. ¿Son culpables los donantes de aquellas inversiones que promueven el tabaco?


Aid, tobacco trade and the making of a global epidemic

  1. Top of page
  2. Abstract
  3. Aid, tobacco trade and the making of a global epidemic
  4. Double standards
  5. Fail safe
  6. Reluctant messiahs
  7. References

From the 1940s to the 1990s, donors provided assistance to war-ravaged, newly liberated, famine-stricken countries in the hope of creating stable democracies. Donors feared that these hot and crowded countries could implode under the burden of feeding their population. Food aid, population control and agriculture were priority areas (Adams 1991). In tropical countries, tobacco cultivation was encouraged (Economist Intelligence Unit 1983), even when the deleterious effects of smoking were becoming known in the developed world (Lock et al. 1998, Berridge 2006).

The tobacco trade gave the world its first multinational enterprise – British American Tobacco (BAT), and cigarettes became the first global product to permeate every culture (Cox 2000), especially in India, China and Japan (Cox 1986). The British and US Governments fiercely contested trade tariffs when competition became stiff overseas. Over time, the tobacco industry gained tremendous clout with domestic and foreign governments and influenced their policy making (Barry 1991). During World War I, the British Government went out of its way to release BAT's assets, which had been seized by the Germans. BAT returned this favour when the British Government was in knots during the sterling crisis of 1931, and again when it needed funds at the onset of World War II (Cox 2000). A 1988 BAT brief revealed that the US Government was manipulating a fragile coalition government (Tobacco Legacy Documents, undated) to reduce import tariffs for cigarettes and backing United States-based cigarette companies to capture Thailand's cigarette market.

During the reconstruction of Europe after World War I, tobacco was vital for aid programmes. In the early years (1948–57), USD 38 millions' worth (or 65 million pounds) of surplus tobacco was shipped as conditional lending to Europe and Far East (Committee on Agriculture 1959, Milward 1987). The United States created a dedicated department for tobacco in 1957 (U.S. Department of Agriculture, 2012), while the British Government's aid agency, the Overseas Development Administration (ODA) and its commercial arm, the Commonwealth Development Corporation (CDC), promoted it extensively between 1962 and 1989 (Woodroffe 1992). Tobacco aid supported cultivation (World Bank 1984, Maxwell 1989, FAO 1989), promoted manufacture, created markets (Anonymous 2002) and market mechanisms [seen recently in Turkey (Kayaalp 2012)]; it subsidised input costs such chemical inputs (Badiane et al. 1997) and fuel wood (Khattak & lqbal 1999); and it provided improved technologies (Haunlyar 1986).

For some countries, the tobacco experience has turned tragic. Initial success was soon followed by crises due to fuel wood shortage in many countries (Geist 1999). In 1984, The World Bank predicted that rapid deforestation would lead to loss of all fuel wood within 8 years in Malawi (World Bank 1984), forcing it to shift from flue-cured to air-dried tobacco. Other countries noticed the impending energy crisis and moved away from growing tobacco altogether (Anderson & Fishwick 1984). From 1979 to 1984, British aid promoted tobacco in sub-Saharan Africa, which compromised investments in cereals, livestock and subsistence farming (All-Party Group on Overseas Development 1985) and increased malnourishment and stunting (Peters et al. 2008, Barford 1991). By 1988, Malawi depended on its neighbours for grain and on the United States for food aid (Lele 1989). The emergence of HIV/AIDS further exacerbated the hunger in communities dependent on tobacco cultivation (Peters et al. 2008, Barford 1991, Charman 2006).

In Malawi, leaf trade was dominated by just four leaf traders, each with a majority American partner (USAID 1993), which lowered US production costs by 30% (AID & Adams International 1985). The US Government was aware of the growing concerns about health and liability rulings and how similar measures in the EC market could jeopardise its trade interests (USAID 1993). With cheaper tobacco imports, tobacco growing in the United States became unprofitable. The US Government inveigled a successful tobacco buy-out programme but left their farmers deprived (Benson 2012). Despite this, cigarette production increased manifold and companies garnered profits from exports and new offshore acquisitions and ventures. Malawi and Zimbabwe in particular are and will be most affected by their overdependence on tobacco. As two of the poorest countries in the world, they are vulnerable to fluctuations in global demand and falling prices (Diao et al. 2002).

Double standards

  1. Top of page
  2. Abstract
  3. Aid, tobacco trade and the making of a global epidemic
  4. Double standards
  5. Fail safe
  6. Reluctant messiahs
  7. References

In just three decades, the epidemic shifted from developed to low- and middle-income countries (LMICs). In 1970, 76% of all smokers lived in rich and developed countries (Beese 1972). By 1995, 82% of smokers lived in LMICs (Gajalakshmi et al. 2000). Between 1972 and 1985, cigarette smoking increased by 2.5% in the United States and declined by 3% in the UK, while it rocketed by 26% in India, 18% in Pakistan, 22% in Poland, 40% in Taiwan and a whopping 97% in Egypt (Maxwell 1992). In 2011, tobacco use killed almost 6 million people; nearly 80% of these lived in LMICs. Although tobacco control is one of the most cost-effective public health interventions (Jamison et al. 2006, CDC 2007), it is the least funded (WHO 2011, Ross & Stoklosa 2012). Ironically, in most countries, tobacco taxes finance health budgets, but very little if any of national health budgets is dedicated to tobacco control: in India, it is <0.02%. The World Bank invested USD 100 million in tobacco control, a paltry sum in comparison with the annual USD 6 billion advertising budget of the tobacco industry (Mackay & Eriksen 2002). The singular lack of resources to fight a well-funded industry is deeply frustrating and often intimidating for front line workers in public health.

In the UK, Germany and United States, the pernicious effects of smoking were becoming known. Eventually in 1964, a strongly worded Surgeon Generals’ Report was launched in the United States, which encouraged several states to legislate to deter smoking (US Department of Health, Education and Welfare 1964). In the UK, exactly 50 years ago, a report by the Royal College of Physicians confirming that smoking was the biggest killer among adults (Royal College of Physicians 1962) prompted governments to put policies in place to reduce smoking not only in the UK, but also in other developed countries. By the early 1980s, smoking was declining rapidly, forcing the tobacco industry to shift to LMICs. Donors played a prominent role in providing financial and political assistance to the tobacco industry to reach a large, uninitiated population in developing countries. The detrimental effect of tobacco is still being felt in the developed world. In the UK, smoking has killed six million people in the last 50 years, but because of a steady decline in smoking, it is estimated that by 2031 virtually no men will smoke in the UK (there may be more women who smoke, but very few men). Yet, governments, shareholders and tax payers in the UK and United States benefit from profits repatriated from LMICs (Callard 2010). But Tony Delamothe, deputy editor of British Medical Journal in an editorial demands his government to ‘boot the manufacturers of these ‘intrinsically harmful products’ out of the UK … They should be shown the door. Their presence in this country shames us all’ (Delamothe 2012). But why ship these companies (and death) to developing countries? For many of the world's poorest countries, tobacco use and the industry are directly impeding their chances of development (Esson & Leeder 2005).

Fail safe

  1. Top of page
  2. Abstract
  3. Aid, tobacco trade and the making of a global epidemic
  4. Double standards
  5. Fail safe
  6. Reluctant messiahs
  7. References

Donor assistance created other problems as well. In tobacco-growing regions, there was little trickle-down within communities, which widened disparities between households that grew tobacco and those which did not. To correct these imbalances, the United States in particular sent generous food aid but also included the tobacco leaf as ‘a gift from the people of United States’ to countries that were potential markets. A Washington Post article criticised that while tobacco use was being discouraged at home, US food aid [called Public Law 480 (PL-480) renamed by President Kennedy as ‘Food for Peace’] was shipping tobacco to millions of starving Indians (Morgan 1974). From 1954 to 1969, 7400 tons of tobacco meant for the cigarette industry was given, along with wheat, rice and milk to stave off a famine in India (The United States Information Service 1970, Anonymous 1974). This was aid in its most perverse form, as it enabled the industry to sell tobacco locally at a very affordable price. Between 1955 and 1977, the United States gave more than USD 700 million worth of tobacco globally. Only a small proportion was a gift, the rest was credit or concessional lending.

In 2008, the United States formally declared that it would no longer give tobacco under its food aid programme (United States Department of Agriculture 2008). In the UK, the ODA also took a tough stand in June 1991, when Lynda Chalker, its head, announced: ‘I understand that BAT have had access to foreign currency provided to developing country governments under our programme aid arrangements for balance of payment support, but was not aware that your company has received direct financial assistance for its activities from the British Government … this support will cease from this day’ (Tobacco Legacy Documents 1991). In response, BAT decided to ‘cultivate contacts in local aid offices, high commissions and embassies’ to ensure that aid meant for agriculture, livelihood and energy also benefitted tobacco cultivation (Millett 1987). In 40 years of aid, tobacco multinationals had gained a strong foothold in the developing world. Between 1970 and 1990, in terms of market capitalisation, Philip Morris International grew by 32% and BAT by 27% annually (Maxwell 1993).

Reluctant messiahs

  1. Top of page
  2. Abstract
  3. Aid, tobacco trade and the making of a global epidemic
  4. Double standards
  5. Fail safe
  6. Reluctant messiahs
  7. References

While the donor community may appear as unscrupulous as the industry itself, one lender decided to put a stop to it. Although a major promoter of tobacco itself (Barnum 1991, World Bank 1991), The World Bank in 1991 announced that it would no longer lend, invest or extend loans for tobacco production, processing or marketing (Fox 1999). It recognised that any support for infrastructure, financial reforms and development projects that even remotely touches tobacco industry operations hugely benefits the tobacco industry. The World Bank also started early negotiations to revitalise tobacco-dependent economies, but most donors ignored this call, including the IFC and IMF.

USAID developed a weak exclusion policy in 1999 and continued to support the tobacco trade in the Philippines, Poland, Sudan and Georgia (USAID webpages, undated); it still fosters business missions and engages with foundations and policy groups with tobacco industry participation (USAID 2007). The United States' avoidance of the World Bank's call and their resistance to ratifying WHO's tobacco control treaty demonstrate that the United States do not see tobacco control as their priority. In fact, it hurts the United States' larger economic interests as profits made overseas by its companies are currently financing the USD 206 billion health compensation to victims of tobacco use in the United States over the first 25 years (the so-called Master Settlement Agreement).

As the tobacco epidemic quietly overwhelms public health, donors (such as the Germans, Dutch, Belgians, French and Japanese) are morally obliged to contribute to reversing the epidemic whose seeds were sown through their aid. The UN and in particular WHO need to pitch in but are politically compromised and too dependent on corporate donations for their existence (Shah 2011). Most corporate foundations now underwrite the global health and development agenda but have conflicts of interest in doing business while trying to do good (Stuckler et al. 2011) and may not want to confront legitimate businesses such as tobacco companies.

Responsible and focused donor assistance is needed to help governments develop a robust tobacco control policy. But irresponsible transfers continue to do the opposite. Donors need to help governments take the tobacco epidemic head on. But first, donors need to detach themselves from the tobacco industry and discard the two-faced policy of reducing tobacco use at home while promoting it abroad.

References

  1. Top of page
  2. Abstract
  3. Aid, tobacco trade and the making of a global epidemic
  4. Double standards
  5. Fail safe
  6. Reluctant messiahs
  7. References
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