FCTC Ratification, Tobacco Prevalence, and GDP Per Capita: Lessons for Indonesia and the Rest of the World | Globalization and health
The above results imply two factors that are of interest to this study. First, this study found a negative association between the number of years since FCTC ratification and changes in smoking prevalence. This is consistent with previous studies that have found a negative association between FCTC implementation and smoking prevalence. [11,11,12,14]. The negative relationships between FCTC variables and smoking prevalence reiterate the importance of FCTC ratification to support national tobacco control efforts. However, simply ratifying the FCTC should not be the primary concern of countries. Rather, it is the national law passed after the FCTC that matters most. In summary, the ratification of the FCTC is very important as a first step and legal basis for the adoption of tobacco control measures. However, without strong enforcement at the national level, FCTC ratification may have no impact on smoking prevalence rates in the country.
The second key finding of the study is that changes in smoking prevalence, which is also influenced by FCTC ratification, do not necessarily influence macroeconomic indicators (in this case, GDP per capita). GDP per capita is a very broad macroeconomic indicator determined by a number of factors. This study concludes that cigarette consumption, represented by the prevalence of smoking, is not a determinant of a country’s GDP per capita. This finding refutes arguments that a declining tobacco industry will negatively impact the economy. Data on the economic contribution of the tobacco industry (through tobacco taxes, labor absorption and tobacco cultivation, and even tobacco exports), mainly in the major tobacco-producing countries such as China, India and Brazil, seem positive. We conclude that the magnitude of the tobacco industry’s economic contribution may be overestimated, and that arguments in Indonesia that increased tobacco control will have disastrous economic impacts are not supported by the experiences of other countries that have ratified the FCTC. . Furthermore, we question the value of the tobacco industry’s economic contribution in light of the associated health costs due to increased smoking-related NCDs, lost productivity, and premature deaths. [16, 17]. The negative externalities created by smoking are often glossed over by proponents of the tobacco industry. A 2015 study in the UK implies that total direct smoking tobacco has been estimated at between £2.7bn and £5.2bn, equivalent to 5% of the total health budget . Furthermore, a 2006 study in China, the largest tobacco-producing country, found that compared to other cash crops, tobacco has the lowest economic rate of return because government tax revenue from tobacco industry continue to decline. .
Intuitively, it is safe to say that FCTC ratification (leading to lower cigarette consumption) is not necessarily related to changes in GDP per capita. The findings of this study should be taken in conjunction with others that suggest that the decline in smoking prevalence as a result of a more comprehensive tobacco control effort under the FCTC ratification can reduce the costs of health of a country. Previous studies have argued that quitting smoking is linked to a significant reduction in healthcare costs [19, 20]. Moreover, reducing the prevalence of smoking can be done at relatively low cost, leading to long-term benefits such as lower healthcare costs and improved labor productivity. [21, 22]. In addition, increasing tobacco taxes could prove mutually beneficial for the economy and the health sector. Increasing tobacco tax rates will simultaneously increase government tax revenue and reduce tobacco-related medical costs . This further adds to the evidence for the importance of demand-side tobacco control mechanisms.
As important as controlling demand, controlling supply will also bring economic and health benefits. Tobacco supply control, which was considered in the FCTC, is important for the social well-being of groups affected by increased tobacco control measures. Since one of the major concerns preventing Indonesia from ratifying the FCTC is the welfare of tobacco growers and tobacco industry workers, it is important for the government to recognize and address the potential negative impacts FCTC measures on these groups. Nevertheless, the domestic tobacco industry in Indonesia is highly dependent on imported tobacco products, so the economic impact on farmers, in particular, may be exaggerated. . Article 17 of the FCTC specifically mentions the need to support viable alternative economic activities for the groups concerned. If implemented in conjunction with other articles of the FCTC, the economic ramifications for workers associated with the tobacco industry can be minimized.