It's been ten years since I lived and worked in Croatia, Kosovo, and Serbia, but there are still a few things indelibly seared into my memory. I remember seeing eight- and nine-year-old child selling cigarettes on street corners in Pristina late at night. I remember seeing children of the same age smoking those cigarettes as they'd being so their entire lives. Most of all, I remember being assaulted with cigarette smoke virtually everywhere I found myself.
"Mind if I smoke?" was less of a question than an announcement of intent. So many people smoke in that part of Eastern Europe that it seems almost as natural as breathing. "No smoking" sections in restaurants or on airplanes? Please. These folks light up in basketball arenas. Imagine running up and down a basketball court through a blue cloud of cigarette smoke. Old Communist-era office buildings were generally built with windows that do not open. Of course, there is no such thing as a smoke-free workplace, but then almost no one worries about it, because so many people smoke.
It is in this environment that Big Tobacco is expanding capacity. What people in this country might view as the marketing and packaging of death, officials in what is now known as Serbia and Montenegro view as much-needed foreign investment.
Of course, no one knows who is going to be dealing with the long-term health effects of all of this "foreign investment". In what is still a Third World country in many respects, money talks.
Tobacco giants may be in trouble over litigation and advertising bans around the world, but there are still some places where Marlboro Man can hang his hat. In September 2003, Philip Morris International, the Swiss-based offspring of U.S. giant Altria, makers of Marlboro, shelled out more than half a billion euros for a majority share of Duvanska Industrija Nis, Serbia's largest tobacco factory, located in the southern city of Nis. At the same time, another giant, British American Tobacco (BAT), bought a smaller factory in the nearby town of Vranje for €87 million, bringing the total direct investment to a hefty €605 million. Both companies had been state-owned, and made cheap brands from locally grown tobacco. Now they will be upgraded. "We want to start manufacturing brands such as Lucky Strike and Pall Mall in Vranje," says Simon Willis, BAT's general manager for southeast Europe. "Exports are clearly on our mind." Philip Morris has similar plans for manufacturing Marlboro in Nis.
Serbia and Montenegro offer a business environment free of any of those nasty health or legal concerns that Western countries feature these days. Big Tobacco can play the role of the benevolent empire-builder, spreading cash and improving the lives of people and the tax bases of local governments. Never mind the fact that they are still manufacturing and peddling illness and death.
According to Serbian government statistics, about 90% of all foreign cigarettes sold in Serbia in 2000 were contraband, and although that rate is somewhat lower today, the Balkans are still the major transit point for tobacco smuggled into the European Union....
The E.U. has charged that the tobacco giants were tacitly involved. In 2000, the European Commission — the E.U.'s executive arm — filed a lawsuit against tobacco giants R.J. Reynolds and Philip Morris for allegedly using Montenegro as a springboard for smuggling millions of cigarettes across the Adriatic Sea for distribution inside the E.U. The companies denied the charges; the case is still pending before a New York court. But everyone agrees that trafficking will slow down once the tobacco firms start doing business in Serbia.
Serbia's quest for foreign investment was not helped by the assassination of Prime Minister Zoran Djindjic by mobsters in March 2003. "It's quite concerning that only three companies bid at the auction," says Milan Kovacevic, a consulting expert (after Philip Morris and BAT, the third bidder was a Croatian tobacco firm). "That shows we're still being seen as a high-risk country." But the tobacco companies' arrival might change that perception by providing perks such as money for local schools and hospitals, and a 10% pay raise for workers, with guarantees that no one will be sacked for five years. A substantial sum will go into social programs in Nis and Vranje. Both towns are dirt-poor monuments to a communist-run economy.
Eastern Europe in the post-Cold War era has not exactly proven to be a free-enterprise-friendly zone. Corruption, greed, and a thriving black market has made it difficult for Eastern European economies to adapt and thrive in the global free-market economy. This is particularly true in Serbia and Montenegro, which, as one of the lingering legacies of UN sanctions, was left with little in the way of a functioning manufacturing sector. Serbia and Montenegro is not devoid of natural resources, but years of UN sanctions has left the economy well behind the rest of the region.
Few in the West will know or care about Big Tobacco's exploitation of the dire economic situation in rural Serbia. Of course, the West hasn't exactly been falling over themselves to offer any sort of economic or humanitarian assistance. In that sense, you can hardly blame them for grasping at the one lifeline that has been proffered.
The sad thing about all of this is that the people who will suffer in the long term will be the children of Serbia and Montenegro. Of course, if it's a choice between children and money, let's remember that children can't vote, even in Serbia and Montenegro.
