Tobacco and Poverty. Anne-Marie Perucic WHO/Tobacco Free Initiative

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1 Tobacco and Poverty Anne-Marie Perucic WHO/Tobacco Free Initiative

2 Tobacco use and production impact on the economy and society Impact on individuals and families Impact on nations

3 Impact on individuals Tobacco and Poverty: A vicious circle The poor are the ones who smoke the most Tobacco worsens poverty among its users: money spent on tobacco >> opportunity cost increased health expenditure due to disease worsened malnutrition reduced access to education

4 The poor are the ones who smoke the most Tobacco use prevalence in slum dwellers in Bhopal, Madhya Pradesh, India, Prevalence of tobacco users < > Income groups Monthly income in Indian Rupees Source: Slum survey,

5 The poor are the ones who smoke the most Tobacco use prevalence in Brazil, Prevalence of smokers < > Monthly income in Brazilian Reals Source: Household Survey on Non-communicable diseases risk factors and referred morbidity in 16 selected State capitals, Brazil

6 Never read Class I-V Class VI-IX SSC+ <1000 Tk Tk Tk Tk Tk Tk Tk Landless The poor are the ones who smoke the most Smoking prevalence in Bangladesh, 1995 Education Monthly Income Land Ownership in acres Source: Sen,, B & Hulme D, 2004

7 The poor are the ones who smoke the most Smoking accounts for much of the mortality gap between rich and poor 60% 50% Risk of death of a 35 year old male before age 70, by education levels in Poland 1996 Other causes 40% 30% 20% 10% 0% 28% 22% 5% 21% 1% 1% 19% 5% 9% Higher Secondary Primary Attributed to SMOKING but would have died anyway at ages Attributed to SMOKING Source: Bobak and others, background paper; Jha and others 1999

8 Tobacco increases poverty among its users Tobacco-related diseases kill one fourth of smokers in the middle of their active life serious impact on family members who are dependant on their income Treatment of tobacco related illnesses is very expensive in most low and middle income countries coverage is low and burden of treatment is borne by Individuals and their families

9 Tobacco increases poverty among its users Tobacco use expenditure as % of total expenditure for tobacco users in Nepal, 2000 % Expenditure on tobacco products Income quintiles Source: Karki et al., 2003

10 Tobacco increases poverty among its users A Smoker's Cigarette Expenditure as % of Monthly Average Wage, % 30% 25% 20% 15% 10% 5% 0% Hungary 6% 7% 7% 7% 8% 10% 11% 11% 11% 13% Slovak Rep Estonia Source: The World Bank Romania Albania Kazakhstan Russia Turkey Kyrgyz Rep Croatia 16% 17% 17% Czech Rep Bulgaria Ukraine

11 Tobacco increases poverty among its users Expenditure on selected items as % of overall expenditures, Brazil, Percentage of total costs on selected items, lowest income group Tobacco Rice Vegetables Fruits Meat Source: Cavalcante & Pinto, 2004

12 Tobacco increases poverty among its users: malnutrition Monthly Expenditure-Tobacco Vs. Nutritious Food of the Street Children in Mumbai, India Avg. Monthly Exp in INR Gutkha Source: Path Canada 2003 Cigarettes Mutton/ Chicken/ Beef Paan with tobacco Bidi Items Consumed 61.9 Milk Fruits Eggs

13 Tobacco increases poverty among its users: malnutrition The price of 20 imported cigarettes could buy: 1.5 kg of cucumbers in Georgia 12 eggs in Panama 12 coconuts in Papua New Guinea 1 kg of fish in Ghana, Moldova or France 6 kg of rice in Bangladesh Source: Mackay and Eriksen,, 2002

14 Tobacco increases poverty among its users How cigarette money could be used instead, Hungary Additional Food a Smoker Could Buy Per Week if He/She Did Not Smoke (1999) Kg/Week Pork Beef Chicken Apple Potato Flour Source: The World Bank

15 Health risks Tobacco Growing: Impact on Farmers risk of getting Green Tobacco Sickness heavy use of pesticides entails toll on health of farmers, most of whom do not know how to handle those chemicals

16 Tobacco Growing: Impact on Farmers Circle of tobacco and debt farmers are provided credit in the form of seeds, fertilizer, pesticides etc. farmers are usually obligated to sell their leaves to the company at a set price often ending up in being less than the value of initial loan also, tobacco leaf are graded by companies and farmers have no influence on the grading

17 Tobacco Employment: Child labour Child labour is a common practice in many developing tobacco producing countries prevented from schooling work in difficult conditions exposed to health risks

18 Tobacco and Poverty Taxation: Cigarette taxes are regressive a larger proportion of the poor smoke tobacco expenditures weigh heavily on the poor BUT, a tax increase can produce a progressive impact because the rich decrease their smoking only slightly in response to a price increase the poor decrease theirs substantially, the poor are highly price sensitive

19 Tobacco and Poverty Taxation Health benefit of a tax increase is distinctly progressive. States and countries can compensate in part for any tax regressivity e.g. by funding cessation services and pharmaceuticals for poor smokers.

20 Tobacco and Poverty Tobacco not only impoverishes individuals and families but also nations: Diseases /Deaths Environment Risks of fires

21 Illnesses from tobacco use Treatment of tobacco related illnesses is very expensive: Heavy burden on governments Heavy burden on governments finance in high income countries, they account for 6-15% of all annual healthcare costs in Chile if all lung cancer would be treated properly, they would account for 6% of total health care costs (ongoing). Loss of productivity due to ill health smokers have about 50% more sick days than nonsmokers, more early retirement, lost working years from premature death

22 Deaths from tobacco use Tobacco-related diseases kill 1/4 of smokers in the middle of their active life society deprived of their contributions as workers

23 Environment Deforestation firewood used to cure and process tobacco an estimated 200,000 hectares of forests and woodlands are cut down each year because of tobacco farming * Pesticides can poison people, water and land Soil degradation (requires heavy fertilizing which can be a pollutant) * Source: Lightwood et al, in Jha and Chaloupka 2000 and Geist 1999

24 Fires Each year, 1 million fires started by children using cigarette lighters Fires caused by smoking kill 300,000 people each year (10% of all fire deaths) and cost an estimated US $27 billion Source: Mackay and Eriksen,, 2002

25 Conclusions Tobacco use imposes a heavy burden on the society and families by increasing illnesses and deaths worsening economic situation of tobacco users and their dependants worsening livelihood of tobacco farmers harming the environment increasing risks of fires

26 Conclusions Governments interventions: increase prices to deter people, specially the poor, from taking up the habit increase accessibility to cessation treatment, particularly for the poor increase awareness of tobacco use impact particularly among the poor and less educated provide support to farmers by finding ways to become less dependant on tobacco growing

THE ECONOMICS OF TOBACCO AND TOBACCO CONTROL, A DEVELOPMENT ISSUE. ANNETTE DIXON, WORLD BANK DIRECTOR, HUMAN DEVELOPMENT SECTOR

THE ECONOMICS OF TOBACCO AND TOBACCO CONTROL, A DEVELOPMENT ISSUE. ANNETTE DIXON, WORLD BANK DIRECTOR, HUMAN DEVELOPMENT SECTOR EUROPE AND CENTRAL ASIA REGION The facts and figures clearly show the enormous