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Indonesia Reluctant to Sign Tobacco Treaty

Indonesia is reluctant to sign a global tobacco treaty aimed at cutting cigarette consumption amid concerns about the impact on the developing country’s economy according to the industry minister.

Indonesia’s $8 billion tobacco industry supports about 7 million people and accounts for about 10 percent of the country’s tax revenue.

“We are reluctant to sign the Framework Convention on Tobacco Control (FCTC) because the cigarette industry is able to boost the agriculture sector and paper industry,” Fahmi Idris told reporters.

“The industry’s multiplier effect is great as it absorbs a huge workforce and contributes a great share of state revenue.”

The World Health Organization‘s FCTC aims to reduce tobacco consumption, including through a ban on advertising and promotion.

Around a third of Indonesia’s 220 million population smoke, with some 90 percent of those choosing kreteks clove cigarettes, whose pungent aroma fills the air from roadside cafes to remote thatch huts.

China, which is the world’s largest cigarette producer, is among countries that have signed the treaty. China, which puffed away 1.947 trillion cigarettes in 2005, signed the FCTC in 2003 and ratified it in 2005.

“The FCTC policy is conflicting with the government’s policy of pro-poor, pro-job and pro-business,” Idris added.

The minister’s statement came after the sector faced a tough time last year due to weak purchasing power stemming from a period of high inflation.

The finance ministry has forecast cigarette firms in Indonesia would produce 220 billion sticks in 2006, unchanged from 2005 but below a peak of 239 billion in 2000, before Jakarta stepped up its moves to hike cigarette prices.

Source: Reuters