Indonesia on track to become world’s largest tobacco market

13 July 2016

If current trends hold, Indonesia is on track to become the world’s largest market for tobacco. As other countries move to regulate the industry, why is Indonesia having such a tough time kicking the habit?

Few smells are as ubiquitous to Indonesia as that emitted by the popular kretek cigarette. A mix of cloves and tobacco, its soft-smelling smoke can be found in cafés, bars and warungs in every corner of the archipelago – and in the hands of Indonesians of all ages.

“If you go into local communities, you often see small kids smoking,” said Mark Hurley, Indonesia programme director for the Campaign For Tobacco-Free Kids. “There’s a real cultural norm – anywhere you go, you’ll see someone smoking.”

This is no accident. The global tobacco industry has, with the acquiescence of the country’s government, used a mix of advertising, marketing and cigarettes flavoured with cloves and chocolate to turn Indonesia into a nation of smoking addicts – and one of the most valuable tobacco markets in the world.

Tobacco
Addict: two-year-old Aldi Suganda Rizal smokes a cigarette at his family home in Indonesia.

“The Indonesian government is absolutely failing to protect the health of its citizens by allowing tobacco products to be heavily marketed across the country,” said Action on Smoking & Health executive director Laurent Huber. “They are favouring the interests and profits of Big Tobacco.”

The end result is a looming public health disaster. According to the World Health Organisation (WHO), Indonesia has one of the highest male smoking rates in the world at 67% – and the number of women lighting up is rising fast as well, partly due to role models such as the popular, chain-smoking fisheries minister Susi Pudjiastuti breaking down gender norms. The impacts are already huge, with the WHO estimating that smoking claims about 425,000 Indonesian lives each year – nearly a quarter of the country’s annual deaths. Some media outlets have even begun referring to the country as ‘Tobaccoland’.

“Cigarettes are still cheap, freely promoted and available on every street. Indonesia has to raise taxes on tobacco”

Smoking rates began to fall in the global north due to huge scandals surrounding revelations in the 1990s that US tobacco companies not only knew about the harmful effects of smoking, but had hidden this information from consumers for years. This, along with concerted anti-smoking campaigns, has led to steady declines in smoking rates in many developed countries in recent decades, including the US, much of Western Europe and Japan. It is little surprise, therefore, that according to Huber, “low-income countries are where tobacco companies see their biggest potential growth”.

Today, Philip Morris’ local subsidiary Sampoerna is one of Indonesia’s largest companies, occupying one of the most imposing towers in a prime spot on Jakarta’s main boulevard, Jalan Sudirman. The firm is free not only to advertise, but also to pursue corporate social responsibility programmes and even sponsor educational events.

“The [government] does not make any restrictions on how and when tobacco advertisements can be published or broadcast,” said Tuti Roosdiono from Indonesian Woman Against Tobacco, an NGO fighting for stronger tobacco regulations. “The [youth] are the target of the tobacco industry, through musical and sport promotions.” Roosdiono added that a huge percentage of the media’s profits come from tobacco adverts, one reason the industry appears loathe to support any advertising restrictions. In contrast, nearby Cambodia, Laos and Singapore have all banned direct advertising, promotion and sponsorships, and all have lower smoking rates than Indonesia.

Compounding the challenge are tobacco companies’ cosy relationships with government, and many anti-smoking advocates believe this is why Indonesia is lagging far behind its neighbours in passing even the most basic tobacco control legislation. Taxes, for example, remain very low by global standards, at just 46% of the retail price, according to the Southeast Asia Tobacco Control Alliance (SEATCA). Thailand’s rate is 70%, while Singapore’s is 72%.

“Cigarettes are still very cheap, freely promoted and available on every street and at every corner shop,” said Mary Assunta, a senior policy advisor with SEATCA. “Indonesia has to raise taxes on tobacco and make cigarettes more expensive.”

Indonesia is now the world’s fifth-largest tobacco market, with 340 billion cigarettes produced in 2014

On the flip side, tobacco farming is a valuable source of jobs, with an estimated 500,000 farmers growing the valuable cash crop and another 600,000 working in manufacturing, in what is now a multibillion-dollar industry. The majority of tobacco is grown in the fertile soils of East Java province, where, according to the WHO, the number of smallholder farms growing the crop has increased over the past decade due to growing demand both within the country and for exports, which totalled $295m last year. For a country with rampant rural poverty, tobacco is, for many families, an important livelihood. It is also an important source of tax revenue, sending $12.91 billion into state coffers last year, the third-largest contributor of any industry.

Besides still allowing advertising and flavoured cigarettes – which many tobacco control experts believe operate as gateways to addiction for children – the country is also the only nation in Southeast Asia that has not yet ratified the WHO’s Framework Convention on Tobacco Control (FCTC), the primary international mechanism for cooperation on implementing public health responses to limit smoking.

“The promotion of public health in Indonesia, especially on the danger of tobacco against people’s health, is very limited compared with the marketing promotion of the tobacco industry,” said Roosdiono. “A strong treaty on tobacco control would provide a legally binding counterforce to the tobacco industry’s expansion.”

Now, the tobacco lobby is pushing for kretek cigarettes to receive ‘national heritage’ designation in a bill currently being considered by parliament, despite the fact that tobacco is not native to Indonesia and that kreteks only emerged in the 19th century. According to Tobacco-Free Kids, the real reason the lobby wants to do this is not to preserve any heritage, but to maintain its special status and market access, even if Indonesia begins to control tobacco more.

“Clove cigarettes pose a particular challenge,” said Hurley. “If this move goes forward, it would take Indonesia backwards in the fight against smoking.” Anti-tobacco campaigners are concerned that, even if strong tobacco control legislation is passed in the future, this ‘heritage’ designation could open up a major advertising loophole for the industry. Though a similar proposal was rejected last year, the industry is trying to make this designation part of an expected tobacco bill that, for now, is focused more on protecting farmers than addressing public health.

Despite a lack of public health action by bureaucrats in the central government ministries of Jakarta, those at the local and regional levels, empowered by decentralisation, are taking tobacco control measures into their own hands.

“We’ve seen a real shift in the awareness of the harms and dangers in tobacco use over the [eight] years we’ve been working [in Indonesia],” said Huber. “Cities and provinces throughout Indonesia are increasingly moving to make public indoor places smoke-free.”

The latest example is Surabaya, Indonesia’s second-largest city, which is considered a model for effective governance in the developing world and is led by its independent governor Tri Rismaharini, who plans to ban smoking in all public spaces. And in Jakarta, another popular independent governor, Basuki “Ahok” Tjahaja Purnama, has banned tobacco advertising in the city.

Anti-tobacco proponents are optimistic that action at the regional level will filter up to the national government and force, for the first time, real change. The question is whether or not this will happen fast enough to avoid the lingering, harmful health impacts of tobacco. “So far, pointing out at an intellectual level that tobacco use is harmful is only slowly transforming into the public movement that is necessary,” said Hurley.

If Indonesia needs a model, it only has to look across the Celebes Sea to its neighbouring island nation, the Philippines. Also plagued with rapidly rising smoking rates and a powerful tobacco lobby, the country began turning the tide by signing the FCTC and passing a tobacco tax in 2012 that reduced cigarette sales from 5.76 billion packs to 4.97 billion packs the year after its introduction.

“As a result of their public health policies, the Philippines has experienced a decrease in smoking prevalence and increasing revenue from tobacco taxes,” said Huber.

As things stand, Indonesia is far from adopting this model and, for now, remains a key moneymaker for the global tobacco industry. It is now the world’s fifth-largest tobacco market, with 340 billion cigarettes produced in 2014, a number that is expected to grow. Only time will tell whether the government will join numerous other nations in tackling this public health challenge, or end up, if current trends hold, in the inglorious position of being the country with the most smokers in the world. 

Source: http://sea-globe.com/indonesia-largest-tobacco-market-smoking