Tackling Indonesian Smoking Addiction a Double Edged Sword

Indonesia has one of the highest smoking rates in the world and a tobacco industry that continues to thrive as the number of smokers decreases globally. While the legal minimum age for smoking in Indonesia is 18 years old, the industry remains largely unregulated, particularly in more remote parts of the country.

In those areas, children can buy a single cigarette from road-side kiosks for as little as few cents. Indonesia's national addiction to tobacco is not only fuelled by its availability and affordability, but also because of the key role it plays in the country's economy. So while smoking remains the leading cause of preventable deaths in the country, analysts say cracking down on the industry is a "double-edged sword".


It's just one part of an epidemic in a country where nearly 70 per cent of all men and one in five children aged between 13 and 15 smoke, according to official data.Mohammed Faisal, executive director of think tank Centre of Reform on Economics Indonesia, told the ABC tobacco has historically been one of Indonesia's largest national industries, with the hand-rolled kretek clove cigarettes ingrained in Indonesian culture. Excise duties on cigarettes brought in 153 trillion rupiah ($15.8 billion) last year, nearly 96 per cent of the national excise total, and equivalent to 10 per cent of total government revenue, according to the Ministry of Industry.

"There are incredibly wealthy tobacco conglomerates who have the capability of influencing the political systems, particularly in regions which are dependent on the industry," he said. However, the revenue generated pales in comparison to the massive cost of the public health crisis caused by smoking. National losses due to cigarette consumption in 2015 reached almost 600 trillion rupiah ($62.2 billion), or four times more than the amount of cigarette excise in the same year, according to the Ministry of Health.

However, Mr Faisal said a collapse of the industry would have damaging consequences and a knock-on effect on many levels of Indonesian society.

"It's a double-edged sword … despite its massive [public health] costs, it is a huge contributor to the national revenue through taxes," he said

The Indonesian Government has taken a different approach to electronic cigarettes, more commonly known as e-cigarettes or vape, applying a high 57 per cent tax on liquid tobacco essences.Vaping has become a popular alternative for Indonesia's younger generation, with vaping cafes popping up all over major cities like Jakarta, Denpasar and Bandung.

Indonesia's Customs and Excise Office estimates there are 300 liquid makers in Indonesia, producing various liquid products for more than 4,000 vape stores and 900,000 smokers.

While the numbers may seem significant, they are dwarfed by the approximately 60 million regular cigarette smokers in the country, and critics are questioning why the cigarette industry doesn't receive the same treatment.

Abdillah Ahsan, a tobacco economics and politics expert from the University of Indonesia, told the ABC increasing cigarette taxes has been a contentious issue in the country due to the economic, cultural and political costs.

"The Indonesian political cycle has made it difficult to see the long-term effects and economic cost of cigarettes, instead it prioritises the yearly economic gains," Mr Ahsan said.

To put it in perspective, the revenue of Philip Morris Indonesia last year was 107 trillion rupiah ($11.1 billion), equivalent to the country's total health budget, he adds.