Foreign investors eye MENA health market

As the “disease of affluence” increasingly affects the wealthier populations of Saudi Arabia, the UAE, Kuwait and other Gulf states, at the same time less advantaged Arab countries including Egypt, Iraq, Lebanon and the Sudan seek to upgrade their hard-pressed healthcare sectors, investors and companies from around the world are taking a new look at this vast market in the Middle East and North Africa (MENA).

Analysts say that governments, even in the GCC, will need to turn more to the private sector to counter rapidly rising problems with obesity, diabetes, cardiovascular and smoking-related diseases, as well as a rise in the elderly population, not to mention the increase in injuries and care needed because of war and conflict.

Healthcare costs in the MENA region are expected to rise to $125bn by 2015, according to the Dubai based asset management firm, Al Masah Capital. This is nearly double the $65.6bn recorded in 2009, it notes. While private equity companies have invested $882m since 2005, the figure is tiny compared to what will be needed, given the cash-strapped budgets of the region’s poorer countries, Al Masah says. At the same time, other analysts report, the Arab oil exporting countries, such as Saudi Arabia, Kuwait, Qatar and the UAE, are looking for foreign investment to fund state-of-the-art facilities for their millions of expatriate residents, who are generally excluded from state-sponsored healthcare facilities, as well as to expand and upgrade their own services to their indigenous populations.

Healthcare expenditure in the Middle East is still among the lowest in the world, according to the Geneva- based World Health Organisation (WHO). In 2009, it averaged just £482 per person, compared to $7,400 in the US. Total expenditure on health as a percentage of GDP varied markedly among countries in the Middle East, according to WHO’s figures for 2010. This ranged from a low of 1.81% in Qatar; 2.63% in Kuwait, 3.41% in Syria, 3.88% in Libya and 4.41 % in Mauritania to a high of 8.04 % in Jordan, followed by Lebanon (7.03%), Sudan (6.32%), Tunisia (6.21%) and Yemen (5.18%).

But, as Mazen Darwazeh, a senior executive at Jordanian-based Hikma Pharmaceuticals points out, there is “an awakening in this part of the world. “Governments,” he told the London daily Financial Times, in September “have realised they have to take more care of their populations, so they are spending more on healthcare.” This, he added, gives “ample opportunities for growth.”

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