Concerted reforms underway in each country in the Gulf Cooperation Council (GCC) to achieve and sustain international standards of healthcare delivery will provide a catalyst for expenditure to boom, benefiting the growing population and providing investors with new opportunities, NCB Capital said on Thursday. In an extensive review of the healthcare sector in the GCC region, NCB Capital, the investment banking arm of National Commercial Bank, said “this progress is being driven by a sharp increase in demand for healthcare resulting from population growth, increased life expectancy, and the growing prevalence of common and costly ‘lifestyle' diseases. The current structural changes are marked by unprecedented innovation, infrastructure upgrades, and expansion.” Commenting on the study, chief economist of NCB Capital, Dr Jarmo Kotilaine, said: “While the development of healthcare provision has traditionally relied almost exclusively on government expenditure, the mounting demand has more recently paved the way for massive private-sector investment in healthcare. Moreover, treatment of cancer and ‘lifestyle' ailments - notably diabetes and coronary diseases - calls for the establishment of specialized facilities on a large scale.” At the same time, greater resources will be needed for public awareness and preventive care. The NCB Capital pointed out that income levels in the GCC region are broadly comparable to developed economies, but healthcare expenditure lags far behind. It has extrapolated that overall healthcare expenditure in the Gulf is set to increase by more than 400 percent to reach $60 billion in the course of the coming 17 years. The study also concluded that: q Governments, especially in the UAE and Qatar, have taken initiatives to create world class medical infrastructure to attract medical tourists and both Bahrain and Qatar have been regional leaders in providing medical services to their citizens. q Due to its size, Saudi Arabia faces one of the greatest logistical challenges in providing comprehensive primary healthcare services but is home to some of the most ambitious medical cluster projects in the region with healthcare the government's second spending priority after education. q Some 40 percent of the population in the region is under 14 years, which amplifies the need for childcare centers and robust immunization programs. q The ageing population, though small in proportion, is expected to double in the next decade and create demand for a range of geriatric healthcare services. “The expansion of healthcare provision will have positive effects on the pharmaceutical sector and ultimately even on medical tourism,” Kotilaine pointed out. The growing demand for medicines represents growth potential for local generics producers, presenting attractive investment opportunities. With government support and foreign participation, the healthcare sector could become one of the drivers of R&D in the region,” he added. Launched in April 2007, NCB Capital has around $13 billion of assets under management and one million clients. __
