This is a blog about how amateur economist view the world
Monday, January 26, 2009
You smoke you go to hell.....
Today, January 26th 2009 MUI has just announced fatwa about smoke prohibition. New task for the angel to record new type of sin. I don't want to argue about does smoke really proscribed (haram) or not. I will focus on how really MUI make their decisions. Is it true that their decision based on Islam perspective. Why smoke proscribed don't applied for everyone and every conditions? I don't going to answer that question instead I will give some fact. First, Indonesia is the forth largest population in the world with 222 million and about 80% of them is Muslim. Indonesia also the largest muslim population in the world. Second, cukai revenue from cigarette industry in 2008 is Rp74 trillion approximately. Remember that government levy high cukai to cigarette not because they care about their peoples health but because smokers are addicted or we can say "not very sensitive to price. This industry also absorb about 6.1 million worker in 2007. Tobacco industry also in 10th position biggest industry according to Susenas 2007.Third, Indonesia will held general election in 2009.
Based on all fact that I mention above, we can get some direction. Microeconomic basic theory said that in short run non-durable goods price and income elasticities is lower than long run. Because people need time to change their behavior. But how if there is some change in what goods is not-allowed to consume by your religion. In my opinion, MUI's fatwa will affect muslims consumption behavior really fast. Not only fast but also massive, 80% of smokers would stop to smoke suddenly. Moreover 6.1 million worker is in danger. So in the end cukai revenue will drop and unemployment will rise suddenly. That will be very bad condition for this country and also for government performance. They will lost their supporter and it can thretening victory changes in 2009 general elections. So what government can do. Can they intervence MUI's fatwa. Smoking is proscribed to muslims but in some note. I think that will be fair enough for both of them.