Economic Dimension Of The Tobacco Industry

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Economic Dimension on Tobacco Industry: Statistics, Companies, Governments and Policies.
Done By Amira Al Wahshi 201150408

It is a very controversial issue when it comes to the economic dimension of tobacco industry, the issue raised is how many diseases and deaths did these companies cause in order to gain profits?
It is clear that tobacco industry is a global economy, as it affects both developed and developing countries. It is considered as the most profitable business not only for the U.S but also to many other countries. In addition to the profits, they also responsible for tobacco's results and harm. To be more specific, let us take a quick look at the statistics on the tobacco industry markets around the world.
Tobacco use costs
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Local governments collect 20 percent of the so-called special agricultural products tax as soon as the tobacco companies state they bought leaf tobacco from tobacco farmers. As a result, these tax revenues make up a large part of the income of the local government budget in the major tobacco-producing provinces. For example, Xiao Qiao Shi a town in Yunnan province, its total revenue was 3.2 million yuan in 2000, of which 2.3 million yuan came from the special agricultural products tax on tobacco.
In addition, the policy of raising taxes aims to reduce tobacco consumption, and increase tax revenue, has effects on smokers and state as well. To support this policy, these measures take the form of health warnings on cigarette packs, bans on smoking in public places and prevent advertising and so on. These measures have many positive and negative. The positive effect is the improved health of individuals and the reduction of hospital costs. The negative impact is that smokers who are forced to buy these products at a higher
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Finally, the liberal economic approach does not reduce the damage resulting from the tobacco industry, on the contrary, privatization policies and the liberalization of the tobacco trade that called by the democratic developed countries and the International Monetary Fund led to increase the number of smokers and increase the profits of tobacco companies not only in these countries but also in countries such as Korea, Mali, Moldova and Turkey which has previous experiment in state-owned companies.
According to the World Bank, these policies, which call for tobacco liberalization, led to the political problems. Where it increased local opposition to the privatization of the tobacco industry as it happened in Turkey. But to no avail, the International Monetary Fund highly supports these policies and pressures states. Governments did not adopt any reaction against it. States gets in to conflicts to gain support and loans from it. Therefore, the institute does not give any importance to the serious health effects of these policies, which in turn influence to the decline in world development

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