JULY 17, 2000 VOL. 156 NO. 2

International tobacco company signs loom over a street in Phnom Penh.

Thank You for Smoking
In destitute Cambodia, Big Tobacco is showing that cigarettes can be healthy—if only for the economy
By KAY JOHNSON Phnom Penh

If lawsuits and worldwide restrictions have left international tobacco executives feeling unloved, they might consider a visit to Cambodia's Kompong Cham province. Here, far from being demonized, Big Tobacco is viewed as a godsend. "Ever since the companies came, our lives have improved," says Tuon Maly, a 43-year-old farmer. In the two years since she started selling to British American Tobacco, her family's annual income has doubled to $2,000. They have bought a new rice mill and a motorcycle and spruced up their two-room farmhouse. Best of all, her two eldest children, ages 20 and 16, can now afford to attend secondary school in a nearby village. "We're very grateful to the company," she says. "We've seen nothing but good from them."

Big Tobacco often gets slammed by health organizations for targeting poorer countries. But one man's exploitation is another's development program. Desperate for foreign investment after years of economy-shredding civil war, Cambodia has been more than happy to receive multinationals eager to develop the country's small tobacco industry. Since 1994, foreign companies have opened 10 cigarette factories. This year, for the first time, Cambodia has become a tobacco exporter, shipping 220 tons of leaf abroad. The result: wealth all around. In Kompong Cham province, for example, some farmers have seen their income grow 500%. "Tobacco has a big impact in alleviating poverty," says Sok Siphana, Cambodia's secretary of state at the Ministry of Commerce.

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Of course, not everyone is enamored of the tobacco boom. Health advocates fear that the country's embrace of the industry, combined with liberal advertising policies, will encourage smoking and lead to a health crisis. Already 86% of rural men smoke, and health officials worry that many of the nation's 6 million young people will pick up the habit. "In the short term, the benefits from tobacco companies are very big," says Dr. Po Samnang, chief technical officer at Phnom Penh's National Center for Health Protection. "But in the long term it will cost the Cambodian people."

Cigarettes are by no means new to Cambodia. For generations farmers in Kompong Cham have grown and hand rolled tobacco on the tranquil, verdant banks of the Mekong River. What is new is the flood of multinational companies entering the country in the past six years. Tobacco is now a $50 million business, accounting for 2% of gdp and employing nearly 50,000 people. British American Tobacco, to cite one leading investor, is seen as a model corporate citizen. Besides investing more than $25 million, B.A.T. funds a local reforestation program. Other big manufacturers who have invested in Cambodia include Philip Morris, Japan Tobacco and Germany's Reemstma. B.A.T. provides training and high-quality seeds to about 400 farmers in Kompong Cham, who have seen their yields triple. Previously, Cambodian leaf wasn't considered to be of export quality, but this year a group of Sri Lankan manufacturers purchased some for factories back home. "Cambodia has the potential to be a preferred supplier of tobacco leaf" in the region, says Carrick Graham, B.A.T.'s corporate affairs manager. Cigarette sales and manufacturing have in past years supplied up to 18% of state revenue, generating $6.5 million in taxes last year alone. "It's a win-win situation," says Sok Siphana. "People are going to smoke anyway. At least multinationals can provide some value-added benefits."

An accompanying explosion in cigarette marketing is causing concern, however. Health officials worry that their anti-tobacco message is being drowned out by a flood of advertising. According to the National Center for Health Protection, cigarette ads on television and radio have quadrupled since 1996. Tobacco brands now make up 46% of all street advertising. "They aim to tell the consumer that smoking is what healthy, wealthy, successful people in other countries do," says Greg Hallen, an adviser to the health promotion center. "Young people are probably going to be influenced by that." Poor record-keeping in the past means it is difficult to know if the marketing blitz has increased the rate of smoking, but health officials are clearly alarmed.

To be sure, in a poverty-stricken country where the average life expectancy is only 54 and where thousands die each year from malaria, land mines and poor nutrition, cigarettes may seem a minor problem. And the economic benefits of the fledgling tobacco industry may outweigh the dangers—for now. It is difficult to convince farmers like Tuon Maly that Big Tobacco is exploiting her and her country. But even she is aware of the health risks. "My son is 20, and I have told him he should not smoke. I absolutely forbid it," she says. The question is: Will Cambodians be able to reap the benefits of tobacco without inheriting its ills?

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