New Investment Funds of $75 Million Should Support More Tobacco Control Measures in Low- and Middle-Income Countries Tobacco & Alcohol 15/11/2021 • Elaine Ruth Fletcher Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to print (Opens in new window) Opening ceremony for the second meeting of the Protocol to Eliminate Illicit Trade in Tobacco Products (MOP2) at WHO headquarters in Geneva. While it pales in comparison to tobacco industry marketing, two new capital investment funds worth some $75 million to support low- and middle-income countries in their fight against tobacco are being created by signatories to the Framework Convention on Tobacco Control and a related Protocol on illegal sales. Together, the funds would yield an estimated $3 million a year for developing new systems to regulate, track and reduce tobacco use. While all eyes last week were on the Glasgow Climate Conference (COP26), another Conference of Parties – on the Framework Convention on Tobacco Ccntrol (FCTC) was taking place in Geneva and virtually. The FCTC’s COP9 is being followed this week by a Meeting of Parties to a new FCTC protocol that aims to eliminate illicit trade in tobacco products. That trade, including both physical and online sales, is a growing concern of countries – because of its potential to undermine new tax laws and other measures that curb tobacco’s harmful influence. The first fund, for $50 million, was approved by the FCTC’s COP9 last week, at the close of the week-long meeting of the Convention’s 181 member states. The second fund, for $25 million, is being considered during this week’s meeting of signatories to a related FCTC Protocol to Eliminate Illicit Trade in Tobacco Products, which has now been ratified by 64 FCTC member states. The new capital investment funds, aim to recruit investors from beyond the health sector, and create annual yields of earned revenues that may be put at the disposal of countries to help them refine and adapt their policy and regulatory tools in the tobacco control battle, Samuel Compton, FCTC spokesperson, told Health Policy Watch. The funds will bolster the long-term stability of FCTC activities – which currently rely upon a biennial budget of some $19.1 million, covered by assessed contributions to FCTC signatories, and extra budgetary support. In terms of managing the funds it is likely that the World Bank make take over the task, Compton said, supported by a board of experts in financial and investment management representing the six World Health Organization Regions, as well as civil society. Tobacco kills an estimated 8.1 million people a year, according to the most recent WHO numbers, including 7 million smokers and another 1.2 million people from second-hand smoke. And market projections show that industry continues to expand – with expected growth of over % 2.7 this year. This expansion is occurring despite evidence that consumption of traditional tobacco products, according to a 2019 WHO report. Although those reports have not included e-cigarette use in their tracking. Illicit trade driving market expansion Illegally manufactured or trafficked tobacco products also driving market expansion. Along with e-cigarettes, another one of the drivers of expansion is the illicit trade in tobacco products – which is easier than ever before thanks to online trade, says FCTC spokesperson Samuel Compton, told Health Policy Watch. “WHO estimates that eliminating illicit trade could reduce cigarette consumption by almost 2% and increase tax revenues by an average of 11%,” said WHO’s Director General Dr Tedros Adhanom Ghebreyesus, in his opening remarks to the meeting of members of the protocol (MOP2) the second such meeting to take place. “The global tax revenue potential from eliminating illicit trade in tobacco is about 47 billion US dollars annually,” he added, noting that the illicit tobacco trade is rooted in a wide range of driving forces, including, “weaknesses in governance and regulation, corruption, insufficient enforcement capacity, and organized crime networks.” It includes both the black market sale of legally produced tobacco products – as well as black market production of tobacco products. Both types of products are marketed and sold in informal markets, and online, at prices that undercut legal, taxed tobacco sales. Under the terms of the FCTC, such tobacco taxes are supposed to designed and use in a way that deters tobacco consumption as well as providing funds to support public health programmes to fight tobacco addiction and use. Added Adriana Blanco Marquizo, Head of the Secretariat of the WHO FCTC, in her opening remarks at Monday’s MOP: “We know the tobacco industry tries to mislead governments, using the illicit trade argument to oppose the adoption of highly effective tobacco control measures, like increasing tobacco taxes. Refraining from increasing taxes is not the solution. But implementation of the Protocol is. Parties should respond with a comprehensive strategy to fight illicit trade by fully taking up its provisions. David and Goliath struggle with tobacco – parallels that of fossil fuels All tobacco products, including electronic cigarettes, increase the risk of heart disease Other than timing, there are other comparisons between the David and Goliath battle against big tobacco seen at COP9 and the battle to phase out fossil fuels waged at Glasgow’s COP26. While the oil and gas sector will earn about $2.1 trillion in 2021 – and were said to have the largest contingent of lobbyists at this year’s COP26 – climate conference participants failed to come up with a clear way forward to raise the estimated $100 billion annually in finance that low- and middle-income nations say that they need to fight climate change effectively – and wind down fossil fuel dependency more rapidly. Similarly, as compared to the tens of billions spent on marketing by the tobacco industry, which will earn revenues of $786 trillion in 2021, global and national budgets to fight big tobacco remain miniscule. Only about $66.2 million of international development assistance for health was dedicated to tobacco control activities in 2019, according to a 2020 analysis published in the peer-reviewed journal, Tobacco Induced Diseases. Considering that, along with the roughly $9.55 million annual FCTC budget, still leaves an estimated $27.4 billion funding gap in monies urgently needed to fight tobacco use, according to a 2019 report by the Framework Convention Alliance, FCA. Tracking and reporting on progress And in the world of tobacco control, there are also challenges in tracking and reporting progress against global goals – comparable to those faced by countries tracking fossil fuel phase-out, or “phase-down” – as per the final language adopted by the Glasgow Climate Conference on Saturday. For instance, while WHO says tobacco use worldwide is declining, recent WHO reports have tracked only smoked tobacco products – excluding the growing market in e-cigarette sales. And there are clear signs that e-cigarette use is on the rise, particularly among young people. That raises questions about how much of the decline in tobacco use is real – and how much is merely a shift to another form of tobacco dependency? At the same time, WHO points to progress made by countries in adopting more health-conscious tobacco legislation, regulation and taxing. “Even during the COVID-19 pandemic, there has been progress on tobacco control,” said Dr Tedros Adhanom Ghebreyesus, in his remarks to the MOP. “5.3 billion people are now covered by one of the best practice tobacco control measures, including increased taxes on tobacco,” he said, referring to the WHO basket of best practices for health, tax and educational that countries can adopt to stop tobacco use. Image Credits: WHO/Pierre Albouy, Chris Vaughan, WHO. 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