NOTE:  Only the Tobacco Article from PHNFLASH 48 is reposted here
 
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        =           PHNFLASH Electronic Newsletter         #
        #      on Population, Health & Nutrition Issues    =
        =               PHN Dept. World Bank               #
        #           Issue 48, December 7, 1994             =
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        >>>In this issue...
        ****›   Health Policy Advisor Position - Tajikstan
        *****›  AIDS Conference
>*>*>*>*>*>*>*> The Economic Burden of Global Trade in Tobacco
        *****/  New Publication
        ****/   What's New in PHNFLASH archive?
 
      <text deleted> ----------------------------------------------
 
        >>> THE ECONOMIC BURDEN OF THE GLOBAL TRADE IN TOBACCO   <<<
 
Tobacco is too great a problem to be left to the health sector. Last year
alone, tobacco claimed 3 million lives worldwide and is expected to claim
10 million lives by the year 2025. Annually, one in every 8 deaths in
developing countries are caused by tobacco; two times that in the developed
world.
 
The Global Economic Burden of Tobacco
 
FAO estimates show that the global consumption of tobacco is expected to
increase by over fifty percent; with all the increase coming from the
developing world.
 
Cost-benefit analysis show that the global net loss resulting from
1,000 additional tons of consumption is US$ 27.2 million. The estimated
benefits to consumers and producers in the form of immediate pleasure and
profits are US$ 2.6 million (in 1990 prices). However, the cost of treating
tobacco-induced diseases such as cancer, cardiovascular, cerebrovascular and
chronic obstructive pulmonary diseases are estimated at US$ 5.6 million.
In addition, there are "indirect costs" measured as the economic value of the
years of life lost to morbidity (US$ 11 million) and premature mortality
(US$ 13.2 million). With extrapolation, the world tobacco market is estimated
to produce an annual global loss of US $200 billion; about one-third of the
loss in developing countries.
 
Situation in the developing world
 
Until now, the developing world has felt only a small part of this economic
loss.  But, with international tobacco companies increasingly targeting the
developing world market, the future could be very different. The projected
growth rate of tobacco consumption in developing countries is expected
to be about 3% for 1995-2000 and is expected to cause an inevitable increase
in lung cancer and other tobacco-related illnesses in the future.
 
Fortunately, there are low cost and effective policies to, control tobacco
use, and if implemented now these policies can avoid the waste of billions of
dollars in developing countries in the future.
 
* Cigarette prices, greatly effected by excise taxes, have strong effects on
the number of new starters and lesser effects (but positive) on smoking
cessation. Some estimates suggest that a ten percent increase in cigarette
prices reduces new starts by almost 15 percent.  The price responsiveness of
teenagers is expected to be even greater in the lowest income countries.
 
* Government health information campaigns, regulation and other policies can
help to offset efforts by tobacco companies to expand tobacco markets.
 
 
The Cost Effectiveness of Tobacco Policy
 
WHO has developed a set of booklets that outline effective anti-tobacco
policies in detail. In general, anti-smoking campaigns are the next most
cost-effective measures to improve health after childhood immunizations.
An anti-smoking campaign costs between 20 and 40 US$ per year of life gained,
compared to 18,000 US$ per year of life gained from lung cancer treatment.
By spending less on treatment and more on anti-smoking efforts many
more years of life can be saved with the available resources.
 
Three years ago, the Bank's board of directors confirmed a policy which had
become de facto over the previous ten years. (a) Bank operations include
anti-tobacco activities in sector work, policy dialogue and lending
operations (b) The Bank does not lend for tobacco production, processing,
imports, or marketing, whether for domestic consumption or for export.
 
[Presented by Howard Barnum, Senior Health Economist, Population, Health
and Nutrition Department, The World Bank at the 9th World Conference on
Tobacco and Health, Paris, 10-14 October 1994]
 
The complete report is available in the PHNFLASH archive (filename: oth0004)
 
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