Sunday Times 2
Puff by puff, towards a heming-heming policy on tobacco
Sri Lanka’s first Prime Minister D.S. Senanayake had a pragmatic guideline in politics expressed by the home grown homily, heming-heming (Slowly-slowly) as compared to his fire-breathing Marxist Opponents who were for an instant ‘Revolution’. Senanayake’s pragmatism enabled this country to win Independence which his critics slammed it as pseudo-Independence. Sixty five years after, with Sri Lanka standing up to the mighty powers of the world, critics can judge whether Independence was true or false and whether the heming-heming policy is best for Lanka.
Senanayake’s pragmatism of heming-heming was wiped off the slate when in 1956 Solomon Dias Bandaranaike under tremendous pressure changed the slogan to Eke Paan Paharakin (by One stroke of the pen). Since then his followers have been attempting to implement policies in a brash hurry with ‘one stroke of the pen’. Bandaranaike started off with immediate nationalisation of bus companies and his successors followed with nationalisation of business and industries without giving much thought to the economic consequences. Insurance, oil, petroleum distribution and plantations are some such examples.
The hangover of the ‘one stroke of a pen’ continues. The decision to shift the Dipped Products factory from Rathupaswala immediately elsewhere — not on proven allegations of groundwater contamination — is a recent example. This was a company, which is a leading producer of natural and synthetic nonmedical and medical gloves having 5 per cent of the global share with a profit before taxation of Rs. 2.2 billion .It also has a factory in Thailand and markets its products in 63 countries. How the recent decision to move the factory — solely because of public agitation and for no valid reason — will affect production of the factory and the contributions that would be made to the Sri Lankan economy still have not been determined.
Global pragmatism
The world over, there are industrial projects and institutions which can be harmful to the environment and health of the people. The Fukushima disaster caused by an earthquake and a tsunami once again awoke the Japanese people to the grave dangers of nuclear energy, having suffered the two greatest nuclear disasters , Hiroshima and Nagasaki in 1945. Despite the public outcry for banning use of nuclear energy, Japanese governments have not bowed to such demands. It would be disastrous for the Japanese economy to give up nuclear power. Neither did the Soviet Union nor its successor Russia give up nuclear power consequent to the Chernobyl disaster. Russia despite its tremendous resources on oil and gas has not and cannot afford to forsake nuclear power.
Sri Lanka in a hurry
Sri Lanka’s tobacco industry faces severe challenges. There has been growing moves against the use of tobacco since the World Health Organisation’s Framework Convention on Control of Tobacco (FCTC) was proclaimed eight years ago
Since then 176 countries covering 90 per cent of the global population have signed up the FCTC. Sri Lanka enacted the National Authority on Tobacco and Alcohol Act in 2006. When compared regionally and globally, Sri Lanka is a successful and active signatory to the convention. Sweeping legislation such as a ban on all tobacco advertisements, promotion and sponsorships, a ban on enclosed public place smoking, increase in the age limit from 18 to 21for purchase of tobacco products, high taxation and pricing together with intense public awareness campaigns are taking the country in the direction envisaged by the WHO.
At a recent demonstration in Colombo, protesters calling for big pictorial warnings on packets of cigaretters
However, it is noteworthy that none of the countries has attempted a total ban on the use of tobacco. The reason for this reluctance is the severe economic implications of such a ban. For example, Malawi earns more than 50 per cent of its foreign exchange is from tobacco, sector which accounts for more than 30 per cent its GDP while 15 per cent of its labour force depends on tobacco cultivation. In Tanzania tobacco is the second largest agricultural export while in India more than 20 million workers are employed in the industry. There is no pressure on governments to destroy the tobacco industry forthwith.
In Sri Lanka there is a raucous and boisterous young lobby, apparently well-funded, demanding immediate action against the tobacco industry which if conceded would lead to its burial. But there are grave implications in such derring-do acts by knights in shining armour: The disastrous impact to the country’s economy.
Tobacco and alcohol have been the manna from heaven to Sri Lankan finance ministers in desperate plights particularly before the budget. A greater part of the deficit is bridged by massive taxes imposed on the sale of tobacco and alcohol. Every year the tobacco industry contributes billions in the form of taxes to bridge budget deficits and thus save the economy from sinking. How much the tobacco industry would have contributed in billions of rupees to save sagging economies and governments over the years has not been worked out. It can be gauged by the contribution of the Ceylon Tobacco Company to government revenue in 2012 — a staggering Rs 71. 2billion.
But to Sri Lanka’s anti-tobacco lobbyists, particularly to the raucous young activists on the streets these contributions in terms of billions of rupees are peanuts. They want drastic steps taken to fold up the industry as evident in the current controversy of placing graphic and pictorial designs on covers of cigarette packs.
The current attempt to have 80 per cent of the pack covered in pictorial and graphic warnings has been challenged in the Supreme Court. According to the Cancer Society of Canada, in 2012 of 198 countries, 62 countries or 31 per cent have graphic health warnings while countries such as the US, Japan, Germany, China, Italy and Sweden do not have any warning on packs. Of the 23 countries which introduced graphic warnings after 2012, only one country has a warning larger than 50 per cent (Ecuador 60 per cent) but Sri Lankan activists want an 80 per cent cover.
When attempts are made to bury the industry in a hurry, no thought is given to the thousands whose families depend on tobacco cultivation and workers in the industry. If the billions of rupees from tobacco do not go into bridging budget deficits, invariably deficits would have to be covered with indirect taxes placed on all essential commodities. Such indirect taxes will lead to galloping inflation. If tobacco tax does not come to the rescue there would be no funds for a great amount of government work. Thus, paradoxically smokers contribute much to the country’s development.
That is why even countries known for their radical socialist policies such as Cuba do not get hysterical about their tobacco industry.
Those Marxist ideologues who reveal in the traditional practice of bashing multinational capitalist tobacco companies seem to ignore the stark reality that even though Fidel Castro in his old age has given up his iconic Cuban Cigar, Cuba has not smashed up its tobacco industry in revolutionary hysterics.
Stringent measures adopted in Sri Lanka over the years appear to have had a long term effect decline among smokers. It all goes to show that the heming-heming policy will in the long run achieve its objectives rather than smashing up the industry in revolutionary hysterics.
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