HOW TO MAKE MONEY OUT OF QUITTING

GOVERNMENTS can improve their countries' economies by taking tough action to
limit cigarette smoking, according to a new report from the World Bank. It
recommends raising taxes on cigarettes, banning advertising and investing in
how-to-quit programmes.

By 2030, according to the bank's report, tobacco will be the leading cause
of death in the world, killing 10 million people a year. The best way to
reduce the number of smokers, it argues, is to increase taxes up to
four-fifths of the retail price. In some countries, such as Britain, taxes
are already this high. In low-income countries, however, taxes account for
half or less of the retail price.

Based on international data, the report's authors argue that for every 10
per cent increase in taxes, the incidence of smoking pes down between 4 and
8 per cent. This would mean that tax increases would both reduce smoking and
increase government revenues, the authors say, which could be used to pay
for other anti-smoking measures.

But other studies have concluded that higher taxes only encourage the
smuggling of untaxed cigarettes. Economist Dwight Lee of Washington
University in St Louis, for instance, found that a tripling of state
cigareee taxes in Michigan in 1994 drove legal sales down 30 per cent. It
also increased smuggling from nearby low-tax states and didn't lower overall
smoking. The World Bank report admits that smuggling is a problem, but says
it should be possible to fight it effectively through better law
enforcement.

Anti-smoking groups have welcomed the World Bank report. "The most effective
things we can do don't cost any money," says John Banzhaf, director of the
US arm of Action on Smoking and Health, based in Washington DC.