JAKARTA,
Indonesia — The densely packed houses along Yogyakarta’s Kali Code River went
from drab to a riot of reds, blues, yellows and whites.
Residents
did not know who had paid for the elaborate painting job last year. The
Yogyakarta press speculated that an unknown company had painted the houses so
they would resemble the colorful favelas of Rio de Janeiro.
It turns
out the village’s benefactor was Philip Morris International and its “Show Your
Colors” advertising campaign. On the side of the Gondolayu bridge that
overlooks the settlements sits a giant picture frame, with tag lines hung above
it reading, “Create your own story” and “Go ahead.”
The
village had been transformed into a giant advertisement for a brand owned by
the tobacco company.
The ads
were another aggressive marketing attempt by an international tobacco company
to gain market share in Indonesia. The country is the second-largest cigarette
market in Asia after China, and had the highest male smoking rate in the world
— 67 percent, according to a 2011 survey — thanks in part to the popularity of
pungent clove cigarettes.
Over the
last decade, it has become a last Eden for tobacco companies facing declining
smoking rates at home. As late as 2004, international tobacco companies had a
marginal presence in the Indonesian market. Today, led by Philip Morris
International, they control around 45 percent.
Yet that
push has been met by an increasingly potent coalition of mayors, health
officials and antismoking groups that has scored some important victories.
In one
prominent example, huge cigarette billboards that dominated the highways of
Jakarta, the capital, were taken down in 2015, as part of a move to ban outdoor
tobacco advertisements by mayors around the country.
Many of
the lobbying efforts that led to local regulations, including in Jakarta, were
substantially financed by the Bloomberg Initiative to Reduce Tobacco Use, the
$600 million fund founded by Michael R. Bloomberg, the former New York mayor.
The
Bloomberg Initiative has designated Indonesia one of its five priority
countries, and has donated more than $10 million since 2007. The initiative is
largely focused on establishing local and regional tobacco control laws in a
nation with a highly decentralized government structure.
“It’s a
battle — like a war,” Yayi Prabandari, a professor of public health at Gadjah
Mada University in Yogyakarta, said of the clash between tobacco companies and
tobacco control organizations.
Before
the Bloomberg Initiative became active in the country nearly 10 years ago,
fewer than 10 cities had laws that restricted smoking in public areas,
according to the Campaign for Tobacco-Free Kids, which jointly administers the
Bloomberg Initiative’s grant programs in Indonesia. Since then, the group says,
more than 170 cities have passed laws heavily restricting smoking in public
spaces.
Yet
tobacco growing has deep roots here. Indonesia is one of the few countries in
Asia that has not signed the World Health Organization’s Framework Convention
on Tobacco Control, which mandates strict limits on tobacco advertising and
sponsorship.
The
Bloomberg Initiative has also created a backlash from smokers’ rights groups,
who portray Mr. Bloomberg as a foreign oligarch determined to stamp out
Indonesia’s proud tobacco tradition.
“People
who smoke today are stigmatized — we’re discriminated against,” said Alfa
Gumilang, the chain-smoking secretary general of Komunitas Kretek, a smokers’
rights group that accepts funds from the tobacco industry.
The
Indonesian government relies on the tobacco industry for around 10 percent of
state tax revenue. Although tobacco is not nationalized, the government issues
growth targets; in 2015, the Industry Ministry released a “road map” for the
industry calling for expanded cigarette production.
In
October, President Joko Widodo visited the United States to promote American
investment in Indonesia. While he was there, Philip Morris announced a $1.9
billion expansion of its tobacco factories in the country — the second-largest
investment that Mr. Joko secured from an American corporation during his visit.
Philip
Morris’s success — it controls 35 percent of Indonesia’s tobacco market through
its local subsidiary, Sampoerna — ushered in a new age of foreign expansion. In
2009, British American Tobacco purchased Bentoel, a local tobacco company that
is now Indonesia’s fourth largest, with around 7.5 percent market share.
According
to Health Ministry officials, Indonesia’s fragmented government ministries
often work at cross purposes when tackling the issue.
Because
of the difficulty of making sweeping changes to tobacco control laws
nationally, Indonesia tobacco control advocates are increasingly pushing for
changes at the local and regional levels, where money from the Bloomberg
Initiative comes in handy.
Dr.
Theresia Sandra, a specialist in chronic lung disease at the Health Ministry,
credits the Bloomberg Initiative with helping local governments counter the
influence of big tobacco. The group “builds organizations to balance against
the strength of industry and opens local governments to the necessity of
protecting their communities,” Dr. Sandra said.
In one
national success, the Indonesian government, with help from the Bloomberg
Initiative, passed a law in 2014 requiring manufacturers to put warning labels
on cigarette packaging.
The
tobacco fight in Indonesia, the world’s most populous Muslim nation, even
extends to the country’s most powerful Muslim organizations, and shows just how
central the issue is for society and the economy.
Muhammadiyah,
Indonesia’s second-largest Muslim organization, became the first major Muslim
group in the country to issue an edict declaring that smoking is forbidden in
all circumstances, citing smoking’s devastating consequences to public health.
The 2010
decision was significant: Muhammadiyah operates thousands of schools,
universities and hospitals around the country. Almost overnight, those places
became smoke-free zones.
But the
Indonesian media quickly pounced on a funding detail. Posted on the Bloomberg
Initiative’s website was a $393,000 grant to Muhammadiyah in 2009. According to
Bloomberg’s website at the time, the grant sought “the issuance and dissemination
of religious advice on the dangers of tobacco use among Muhammadiyah/Islamic
institutions.”
Critics
accused Muhammadiyah of seeking to unite Muslim opinion against tobacco in
return for the grant money.
Dr.
Sudibyo Markus, who led Muhammadiyah’s health department at the time, said
there had never been any quid pro quo.
Meanwhile,
religious leaders affiliated with Nahdlatul Ulama, Muhammadiyah’s main rival,
criticized Muhammadiyah for supposedly bowing to Bloomberg’s money. But
Nahdlatul Ulama, which does not view smoking as forbidden in most
circumstances, receives funding from the foundation wing of Djarum, Indonesia’s
third-largest tobacco company.
The
group’s vice chairman, Maksum Mahfudh, said there was “no relationship
whatsoever” between the funding and its decision that it would not forbid
smoking. He added that moving “drastically” against tobacco would impoverish
the farmers and sellers who are “grass-roots people of N.U.”
For now,
the two sides appear to have fought to a draw. After steadily rising for a
decade, the smoking rate has plateaued, according to the Indonesian Family Life
Survey, funded by the United States National Institutes of Health, that was
released in April.
Still,
Philip Morris International remains optimistic about Indonesia. In a February
conference call with investors, André Calantzopoulos, the chief executive
officer, said Indonesia remained a good bet.
“We
remain optimistic about the profit growth opportunities in this key market
thanks to its growing adult population and rising income levels,” he told them.
Jon Emont
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