Health Sector to Return to Growth

The UAE’s healthcare sector remains stable despite the financial chaos created by the downturn. The pipeline of projects has been affected but is now gradually opening up again and players are optimistic that the sector will soon return to growth.

However, one issue that has to be addressed is the lack of trust in medical practitioners. The good news is that industry leaders are aware of this. “Historically the facilities offered and the general practice as a whole have lacked sophistication and expertise,” said Dubai Healthcare City (DHCC) Senior Vice-President Dr Ayesha Mohammed Abdullah.

“We’ve all heard the horror stories so the mindset has always been, if you’re really sick you need to find an expert in your country of origin or look for healthcare experts somewhere else. DHCC is changing that perception, especially with the high quality of medical references we demand from our doctors and other medicine-related professionals. We conduct detailed background checks and ensure they have board certification.”

Today more and more firms are focusing on the healthcare sector while the construction and property sectors remain weak.

“No one is exempt from the economic crisis, but we have been less receptive to the recession than most Western countries,” Abdullah said. “You also need to remember the healthcare industry is part of a country’s basic infrastructure. People still need medical care and, crisis or not, they will walk through the door if they are sick.”

“We are focusing on the healthcare market because this is the kind of industry that will sustain [us] through out the downturn,” Steve Williams, CEO of Gulf Finance, a Shuaa subsidiary, said.

“Because we are responsible lenders we are looking at sectors with bit more predictability,” he added. “For example, with more than 1.2 million people in Dubai alone and 4.5 people in the UAE as a whole, healthcare has to be a critical concern.”

“So a clinic that is looking at an MRI scanner and has proven clients using that piece of equipment. That represents really good opportunity to support a growing business that is supporting the emirate,” Williams said.

“The population of the region, and especially the UAE, will increase at faster rates than the global average,” Ki Wan Kim, CEO, LG Middle East and Africa Regional Company, said. “With increases come the associated burden on the existing healthcare infrastructure and while governments are investing to develop the infrastructure, they are and will be for the foreseeable future, playing catch up,” To this end, LG has begun beefing up its healthcare offerings in the region by inducing the sense of need to consumers.

Yearly, the UAE is spending $1bn on sending patients abroad for specialty cases, Adil Ameer, Vice-President at Dubai Healthcare City, said. The total regional spending on healthcare is slated to have touched $137bn last year, he said.

Currently about $14bn worth of healthcare-related projects are underway in the Gulf, with Saudi Arabia alone spending more than $6.6bn on a total of 83 projects, and the UAE and Qatar spending $2.9bn and $2.8bn, respectively. While there are 100 hospitals in the planning stage, a number of them have been delayed due to the financial crisis.

Ameer admitted that while there is a big opportunity in capturing the healthcare, market access to capital has become a major obstacle in pursuing investments.

DHCC’s Abdullah, however, said “everything is on track as planned”.

According to a report by Ithmar Capital and Dow Jones Private Equity, Gulf Co-operation Council countries (GCC), need 138,965 hospital beds; 140,334 physicians and 227,079 nurses by 2050 to maintain the current healthcare levels.

“The requirement for healthcare provision to meet the needs of population all over the world is undiminished in the face of unprecedented financial turmoil,” said Faisal bin Juma Belhoul, Founder and Managing Partner, Ithmar Capital.

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