Article Text

PDF

Exploring the impact of foreign direct investment on tobacco consumption in the former Soviet Union
  1. A B Gilmore,
  2. M McKee
  1. European Centre on Health of Societies in Transition, London School of Hygiene and Tropical Medicine, London, UK
  1. Correspondence to:
 Dr Anna B Gilmore
 European Centre on Health of Societies in Transition, London School of Hygiene and Tropical Medicine, Keppel Street, London WC1E 7HT, UK; anna.gilmore{at}lshtm.ac.uk

Abstract

Background: Tobacco is the single largest cause of morbidity and mortality in the developed world; in the former socialist bloc tobacco kills twice as many men as in the west. Although evidence shows that liberalisation of the cigarette trade through the elimination of import barriers leads to significant increases in consumption, far less is known about the impact of foreign direct investment on cigarette consumption. This paper seeks to explore the impact that the substantial transnational tobacco company investments have had on patterns of tobacco trade and consumption in the former Soviet Union.

Design: Routine data were used to explore trends in cigarette trade and consumption in the 15 countries of the former Soviet Union from the 1960s to the present day. Comparisons were made between trends in countries that have received substantial investment from the tobacco transnationals and countries that have not.

Results: Between 1991 and 2000 cigarette production increased by 96% in countries receiving industry investment and by 11% in countries that did not. Over the same period cigarette consumption increased by 40%; the increase was concentrated in countries receiving investments. Despite these investments, cigarette imports still outweigh exports and no trade surplus has yet to result.

Conclusions: The findings suggest that liberalisation of inward investment has a significant and positive impact on cigarette consumption and that without appropriate safeguards, market liberalisation may have long term negative impacts on health. Specific trade rules are needed to govern trade and investment in this uniquely harmful product. Implementation of effective tobacco control policies should precede tobacco industry privatisation. International financial organisations pressing for privatisation should ensure this occurs.

  • FAO, United Nations Food and Agriculture Organization
  • FDI, foreign direct investment
  • FSU, former Soviet Union
  • GATT, General Agreement on Tariffs and Trade
  • IMF, International Monetary Fund
  • TTCs, transnational tobacco companies
  • USDA FAS, US Department of Agriculture, Foreign Agricultural Service
  • former Soviet Union
  • tobacco consumption
  • trade liberalisation
View Full Text

Statistics from Altmetric.com

Footnotes

  • Funding: This work was supported in part by the National Cancer Institute, US National Institutes of Health, grant number 1 R01 CA91021-01.

  • Conflict of interest: AG is board member of ASH-UK (unpaid)

  • The opinions are those of the authors alone.

Request Permissions

If you wish to reuse any or all of this article please use the link below which will take you to the Copyright Clearance Center’s RightsLink service. You will be able to get a quick price and instant permission to reuse the content in many different ways.