Author/s
13 Oct 2018
I'm too cheap to pay for a gym membership, so I often work out in public parks. One of my favourite spots is a large lawn right by my office building; in the evenings, it's filled with burly rugby players, gravity-defying yoga enthusiasts, and frolicking kids waiting for their parents to finish work.

It's quite an idyllic scene - if you gloss over the smokers. Which, for the record, is hard to do, when you're gasping for air over your 100th jump squat.

Let me be clear: I'm in no way saying smokers have no right to puff as they wish - it's a public park, and they have as much claim to the space as anyone.

But I'm always confounded when smokers light up right next to people who clearly aren't gunning for exposure to second-hand smoke - especially little children.

This in a country famous for its tough stance on tobacco. Top of mind is the country's high tax on cigarettes. According to Singapore Customs data, over the past decade, the country earned more from tobacco customs and excise duties than those of liquor, motor vehicles, and petroleum and compressed natural gas.

There are also stringent measures to tackle illicit trade, public campaigns to encourage smokers to kick the habit, as well as bans on tobacco advertising, promotion and sponsorship. I've even had tourist friends buy Singapore cigarette packs as souvenirs - so shocked and awed were they by images of cancerous tongues and blackened lungs (which supposedly act as smoking deterrents).

This extends to a zero-tolerance stance on vaping. In February this year, Singapore criminalised the use and possession of e-cigarettes - tightening laws which had previously only banned the sale, import and distribution of e-cigarettes.

While the debate over e-cigarettes continues, the Singapore government, for its part, has said that a harm-reduction approach misses the point. "This entails enabling, even facilitating, a person to do harm to himself, albeit to a lower degree. We should be focused on preventing harm in the first place," said a Ministry of Health spokesperson recently.

The unequivocal position on public health is laudable, but there is another side of things that may seem contradictory.

For one, Singapore has been characterised as the regional headquarters of Big Tobacco. Indeed, British American Tobacco and Philip Morris have a significant trading presence here; the former even manufactures cigarettes at Senoko Loop.

Singapore exports more cigarettes than it imports. According to International Trade Centre data quoted by Lee Kuan Yew School of Public Policy (LKYSPP) academics, Singapore imported US$785.5 million worth of cigarettes in 2017, with over half coming from China and Indonesia. In total, the 45,959 tonnes accounted for 3.5 per cent of the world's cigarette imports. Meanwhile, the value of cigarettes exported in the same year stood at US$1.05 billion; 57,939 tonnes of cigarettes were exported to countries such as Vietnam, Thailand and Malaysia - representing 4.9 per cent of global cigarette exports.

More surprising is the little-known fact that Singapore government entities, such as GIC and the Monetary Authority of Singapore (MAS), invest in tobacco.

Indeed, in the 2017 annual reports of British American Tobacco (BAT) Malaysia and Japan Tobacco Inc (JTI), Singapore's sovereign wealth fund is listed as a significant shareholder; GIC is among the top 30 largest shareholders in BAT Malaysia, and one of the top 10 in JTI. In BAT Malaysia's 2016 annual report, MAS, Singapore's central bank, also made the top 30 list.

LKYSPP researcher Gayle Amul recently pointed out at the 12th Asia-Pacific Conference on Tobacco or Health: "GIC/MAS tobacco investments disregard (World Health Organization Framework Convention on Tobacco Control) guidelines."

Specifically, Article 5.3 states: "Government institutions and their bodies should not have any financial interest in the tobacco industry, unless they are responsible for managing a Party's ownership interest in a State-owned tobacco industry."

Of course, one could argue that the Singapore government isn't directly investing in tobacco. As GIC's website states: "Although we are government-owned and manage Singapore's reserves, our relationship with the government is that of a fund manager to a client. We operate, invest and measure our performance in the same way as any global fund management company."

That client however is Singapore's Ministry of Finance.

In response to queries from The Business Times, MAS emphasised that it "appoints external fund managers to invest in equities on a discretionary basis", and that these mandates are benchmarked against market-based indices.

Both GIC and MAS declined to comment on tobacco-related holdings, stating that they do not comment on specific investments.

But such investments do sit uncomfortably with the government's hardline stance against tobacco. To remove any ambiguity, whatever returns they bring are probably worth sacrificing.


This article first appeared in The Business Times on 13 October 2018: https://www.businesstimes.com.sg/life-culture/clearing-the-air-on-tobacco-investments