Reflections from Addis Ababa and the financing for development conference: why was alcohol taxation not taken up, despite the scientific evidence and the fact that alcohol is a major obstacle to development…

At the recently concluded Third International Conference on Financing for Development (FFD3) in Addis Ababa, Ethiopia, high ranking officials from governments, private sector and NGOs met to consider how the new and ambitious development agenda would be financed post-2015.

The conference which was hosted by the United Nations Department of Economic and Social Affairs (UNDESA) was a key meeting in the run up to the adoption of the Sustainable Development Goals (SDGs) by the United Nations General Assembly (UNGASS) in September 2015. The Millennium Development Goals (MDGs), which expire in September 2015, will be replaced by the SDGs, which will be the new global development roadmap for the next 15 years up until 2030.

The outcome document of the FFD3 conference, titled the Addis Ababa Action Agenda (AAAA), emphasized the triple bottom line approach. It means that the SDGs will be a blueprint for sustainable development, not just a concerned with the economic and social aspects of development but also with the environmental ones, hence the title Sustainable Development Goals.

Since the conference was about finance, there was a lot of talk about exploring innovative ways of financing development as well as further exploring traditional means. While it was acknowledged that traditional sources such as Overseas Development Assistance (ODA) would still be required to fulfill the new development goals, great emphasis was also placed on the need to improve domestic resource mobilization particularly through taxation, as a means to financing development.

The outcome document therefore includes recommendations such as the need for improved revenue administration through improvement of tax systems, broadening the tax base, improving the efficiency and volume of tax collection, limiting exemptions and curbing evasion. It also addresses fair taxation, transparency, corruption and the need to enhance international cooperation to combat illicit financial flows.

On the subject of health financing, important measures were included in the AAAA. Taxation of tobacco products was highlighted as a means of financing the response to the burden of non-communicable diseases (NCDs) and the need to strengthen implementation of the WHO Framework Convention on Tobacco Control (FCTC) was mentioned. This was a win for tobacco control work because the AAAA recognized that taxation can reduce tobacco consumption, healthcare costs resulting from tobacco and generate finances for development – all measures for which there is evidence of robust effectiveness.

Curiously however, the similar benefits of increasing alcohol taxes were not highlighted in the AAAA despite of widely available evidence. Considering a) that the alcohol industry has been growing and b) that alcohol harms are increasing especially in the emerging markets of the global south, c) that alcohol poses a serious obstacle to development and d) the fact that alcohol is one of the four main NCD risk factors, one would expect that alcohol taxation would be an obvious choice of financing for the SDGs. Increasing alcohol taxation would not only provide revenue for development, but just like tobacco it would reduce the NCD burden as well as finance the healthcare response.

Unlike tobacco however, alcohol taxation holds potential for addressing a range of social problems such as violence against women and children, sexual abuse, violence between men, homicides and other crimes, road traffic accidents and so on. These are some of the very problems that the proposed SDG’s seek to address over the next 15 years.

It seems therefore that a proposal to include alcohol taxation as means of reducing its harms in society and as a source of development finance would have been a natural fit in the FFD3 outcome document. Perhaps such a proposal lacked the consistent intensive lobbying that normally takes place before and during such meetings? Or perhaps it did, just that it was in the opposite direction, against alcohol taxation. This would not be the first time that alcohol industry forces have lobbied against measures aimed at protecting public health and promoting development.

In the 2010 Global status report on NCDs, WHO proposed that the global NCD epidemic could be reversed with modest investments in interventions. The report suggested that the cost of implementing some interventions would be so low that country income levels would present no obstacles. These interventions, called the best buys, were policy measures aimed at addressing the four main NCD risk factors i.e. tobacco use, alcohol use, physical inactivity and unhealthy diets. In the case of addressing the harms of alcohol consumption the proposed best buys were increasing taxes on alcoholic beverages, restricting marketing of alcoholic beverages and banning advertising and restriction of access to retailed alcohol.

Come 2012, stakeholders were responding to the WHO Discussion Paper “Development of an updated Action Plan for the Global Strategy for the Prevention and Control of Non-Communicable Diseases .”

In their submission to the discussion paper, the Global Alcohol Producers Group (GAPG) – an alcohol industry lobby group, viciously attacked the best buys approach instead favoring the weakest measures possible to curb alcohol harm.

The main thrust of the alcohol industry lobby was that alcohol is not a harmful substance per se but rather the way in which alcohol is consumed is the problem. Hence their opposition to the best buys since they reduce the amount of alcohol consumed at the population level. Yet this was precisely the reason why WHO recommended the best buys: There is a dose-response-relationship where harms increase with volume of alcohol consumed at both the individual and the population level.

Of concern to FFD3 is that these GAPG submissions from 2012 actually specifically opposed the idea of funding NCD interventions through increases in alcohol taxes. By the time the Global Action Plan for the Prevention and Control of NCDs (2013-2020) was launched, it didn’t even feature the term best buys or suggest taxation of alcohol as a means of controlling NCDs or funding the healthcare response.

Could this process have had anything to do with the absence of a proposal on alcohol taxation as a means to financing development at FFD3? Your guess is as good as mine.

Download the AAAA here: Addis Ababa Action Agenda Outcome Document, July 2015