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GOVT DRAFTS POLICY TO CURB FDI IN TOBACCO INDUSTRY

The government is planning to restrict foreign direct investments (FDI) in the tobacco sector so that the supply of the harmful elements can be curtailed, officials said. The draft National Tobacco Control Policy, which was recently sent to the ministries and departments concerned seeking opinions, said controlling the supply chain is important alongside lowering the demand to contain tobacco consumption. In 2018 Bangladesh received $3.61 billion in FDI, of which $1.47 billion came from Japan to acquire local Akij Group’s tobacco business. Foreign investment is substantial in several tobacco companies in Bangladesh, including the British American Tobacco, which is the top market player.

According to Progotir Jonno Gyan (PROGGA), an anti-tobacco research organisation, tobacco kills over 162,100 people in Bangladesh a year.The draft policy noted that to contain the tobacco supply in the market, steps will be taken to encourage farmers to cultivate other crops instead of tobacco. A separate policy will be formulated to control tobacco cultivation, it said. Farmers engaged in tobacco cultivation will be given permanent jobs in other sectors, according to the policy. No new licences will be issued for setting up factories for producing tobacco products.

Necessary rules and regulations will be framed and implemented to stop illegal tobacco trade in the country and international protocols on this issue will be executed. Electronic cigarette, IQOS, electronic nicotine delivery systems, electronic non-nicotine delivery system, and production, trading, importing and marketing of all types of electronic devices for tobacco use will be banned. The draft, referring to the Global Adult Tobacco Survey 2017, noted that some 35.3 per cent of adult people in Bangladesh consumes tobacco on smoked or in smokeless form.

Former finance adviser A B Mirza Azizul Islam welcomed the decision of barring foreign investment in the tobacco sector. “In any case, new investment in the tobacco sector should be discouraged,” he told the FE. Mr Islam said like in the past, this fiscal’s budget also raised taxes on cigarettes but not on bidis, whose main consumers are the poor people. The differentiated tax on tobacco needs to be reviewed to discourage its consumption, especially considering the poor’s health, he noted.

Source: The Financial Express, 16.08.2019

Link: https://thefinancialexpress.com.bd/economy/bangladesh/govt-drafts-policy-to-curb-fdi-in-tobacco-industry-1565930806