In Indonesia, the national universal health coverage scheme (Jaminan Kesehatan Nasional [JKN]) has consistently overspent against its budget since it was introduced in 2014. In 2017, a new regulation diverted 37.5% of tobacco tax revenue collected at the district and city level to the central government in order to increase government contributions to the JKN. Through a review of policy documents and interviews and focus group discussions with relevant stakeholders, this article explores the history of the JKN and its relationship to local tobacco taxes. Offering an ex‐post assessment of the policy and its implementation, we find it negative on three fronts: funding for local anti‐smoking initiatives and services was cut, the procedures for implementing the policy were complex and time‐consuming, and it did not contribute as much as anticipated to the JKN. These findings underscore potential pitfalls of politically motivated policy that fails to consider implementation and impact. We recommend that the policy be revoked, and local tobacco tax revenue reallocated to its initial purpose, which includes promoting local smoking prevention programs and health service delivery.
Background: With a 264 million population and the second highest male smoking prevalence in the world, Indonesia hosted over 60 million smokers in 2018. However, the government still has not ratified the Framework Convention on Tobacco Control. In the meantime, tobacco import increases rapidly in Indonesia. These create a double, public health and economic burden for Indonesia's welfare. Objective: Our study analyzed the trend of tobacco import in five countries: Indonesia, Pakistan, Bangladesh, Zimbabwe, and Mozambique. Also, we analyze the tobacco control policies implemented in these countries and determine some lessons learn for Indonesia. Methods: We conducted quantitative analyses on tobacco production, consumption, export, and import during 1990-2016 in the five countries. Data were analyzed using simple ordinary least square regressions, correcting for time series autocorrelation. We also conducted a desk review on the tobacco control policies implemented in the five countries. Results: While local production decreased by almost 20% during 1990-2016, the proportion of tobacco imports out of domestic production quadrupled from 17 to 65%. Similarly, the ratio of tobacco imports to exports reversed from 0.7 (i.e., exports were higher) to 2.9 (i.e., import were 2.9 times higher than export) in 1990 and 2016, respectively. This condition is quite different from the other four respective countries in the observation where their tobacco export is higher than the import. From the tobacco control point of view, the four other countries have ratified the Framework Convention on Tobacco Control (FCTC). Conclusion: The situation is unlikely for Indonesia to either reduce tobacco consumption or improve the local tobacco farmer's welfare, considering that the number of imports continued to increase. Emulating from the four countries, Indonesia must ratify the FCTC and implement stricter tobacco control policies to decrease tobacco consumption and import.
Academics have thoroughly investigated how commodities affect the economy. Some examples from recent papers discuss how commodities trigger economic growth (De V. Cavalcanti et al., 2015) and global economic activity (Mont'Alverne Duarte et al., 2021), affect real GDP (Charfeddine and Barkat, 2020), and contribute to real and nominal shocks (Kim and Zhang, 2020). However, none of them try to explore how tobacco, a hot commodity, affects the economy. This is surprising because tobacco has a huge market size. The US market size of tobacco was more than 30 billion USD in 2011 (Zheng et al., 2017), whereas the global market size in 2018 was estimated at around 814 billion USD (British American Tobacco, 2020).Tobacco's sector contribution has been positive to the economy in many tobacco-producing countries. In China, out of the seven food industries with significant market power, the tobacco industry has the largest return to scale to the economy (Dai et al., 2018). Moreover, in an even smaller producer such as Malawi, a positive shock to tobacco prices yielded a positive return to the country's GDP (Bangara and Dunne, 2018). This also applies to
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