Ali Ettefagh at PostGlobal

Ali Ettefagh

Tehran, Iran

Dr. Ali Ettefagh serves as a director of Highmore Global Corporation, an investment company in emerging markets of Eastern Europe, CIS, and the Middle East. He is the co-author of several books on trade conflict, resolution of international trade disputes, conflicts in letters of credit, trade-related banking transactions, sovereign debt, arbitration and dispute resolutions and publications specific to the oil and gas, communication, aviation and finance sectors. Dr. Ettefagh is a member of the executive committee and the board of directors of The Development Foundation, an advisor to the United Nations High Commission for Refugees, and an advisor to a number of European companies. Dr. Ettefagh speaks Persian (Farsi), English, German, French, Spanish, Italian, Arabic and Turkish. Close.

Ali Ettefagh

Tehran, Iran

Dr. Ali Ettefagh serves as a director of Highmore Global Corporation, an investment company in emerging markets of Eastern Europe, CIS, and the Middle East. more »

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Profits Trump Health Concerns in Global Tobacco Debate

The Current Discussion: India recently passed a national smoking ban. Should the rest of the world follow, or is that stepping over the line?

Perhaps we all live to merely corroborate a futile and ridiculous, circular argument of big business in life, liberty and the pursuit of happiness. Alternatively, we are all just beings made to serve at the leisure of credit providers, rating agencies, junk bond dealers and marketing schemes that compel people to buy and burn a manufactured product -- and harm themselves with it.

But again, I might be too harsh here as there are as many "studies" and papers published in favor of smoking as there are against it. That too is good for business, or so it seems. Somehow the truth falls victim to this health vs. wealth debate. A quick look at the annual reports of the top ten tobacco companies show that sales are growing in the developing world, compensating for the decline in sales in the developed world (and thus tax revenue for those governments). As such, the tobacco debate is always framed as a business discussion. The focus always shifts to the circulation of large sums of money as the centerpiece of the debate rather than to the product itself. Companies from the developing world (Korea, China, Brazil, Pakistan and Turkey) have joined their traditional rivals in a highly profitable public-private enterprise.

A pack of branded "quality" cigarettes costs about 30 cents to produce. It is sold for about $1 before taxes and distributor margins are added. An end-user in Britain, for example, will pay a retail price of £6.50 (about $11.50) for it. The difference pays for transportation, profits, taxes, and margin layers for the distribution chain. Tobacco profits create employment, fund lobbyists and politicians, bring business for farmers, and additional indirect "business" for the healthcare sector. Illegal and "grey market" profits fund other economic activity. All of these cells are existential reasons for the tobacco trade to remain legal, but skewed laws restrict use by buyers.

Banning smoking in public places is a trend that started in the nations of the developed world. Somehow they discovered their product to be harmful to themselves but absurdly less so to foreigners. Most of European Union and American nations prohibit generating tobacco smoke in public and work places. India has followed suit and has added a cosmetic, but futile, measure as an unenforceable, publicity stunt — one may not be seen smoking outdoors. If Singapore bans chewing gum, surely a nuclear, space-bound India can ban smoking in public! But can this be realistically enforced against more than a billion people? And is it cost effective to enforce a fine of $4 when more than half of India's population lives in rural areas? Will there be a hotline to report suspicious activity and summon SWAT teams of cops? A witness protection program? Another heap of bureaucracy and intrusion in lives of people? And how much tax on lawful cigarette sales will be directly spent on health education?

We have similar laws in Iran that ban smoking in public places (restaurants, coffee shops, government offices, etc.), sales to minors and any kind of tobacco advertising. But it has not slowed the growth of the cigarette market. Moreover, it is a business big enough to punch holes in the American policy of trade sanctions against Iran, where the sale of many American products to Iran is banned (be it airplanes and military gear to razor blades, shoes or light bulbs). However, the American sales of agricultural products to Iran are allowed and manufactured cigarettes somehow fit this definition! Lobbyists and big business, take a bow please!

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