GRM 2010 GRM 2011

Abstract Details

Family Name:
First Name:
Dr. Mussaad
Title of Paper:
Developing a Knowledge Economy in the Middle East to Encourage Economic Diversification with a focus on Health and Education
Paper Proposal Text :
As evidenced by recent political events and the recent sldie in the price of oil, the economies of the Middle East and more specifically the GCC, need to encourage a more knowledge based economy, focusing on investing in healthcare and education and eventually becoming a net exporter of talents for these two recession proof industries.

It is no secret that Gulf Cooperation Council (GCC) governments are spending billions of dinars, riyals and dirhams on upgrading their healthcare infrastructure. Local and regional newspapers are filled with stories on newer, bigger and flashier hospital projects.
Saudi Arabia’s 2013-2014 budget includes funds for 19 new hospitals in addition to the 102 hospitals currently under construction in the Kingdom (only about 9 of these projects have strong involvement from the private sector). The Kuwaiti Ministry of Health is planning around $5 billion worth of hospitals and medical towers to upgrade an infrastructure that has been largely stagnant since the 1980s. Abu Dhabi and Qatar are both building multi-billion dollar hospitals and medical (research) centers with both the Cleveland Clinic Abu Dhabi and Sidra Medical Research Center slated to come online with the next 1 – 2 years.

In Dubai, the picture is a bit different, and despite the Dubai Health Authority’s $816m and $43.8m upgrades to the Dubai and Rashid hospitals respectively, most of the hospital and clinic capacity in the City of Life is being built by the private sector which will enjoy a rapid boost when mandatory private healthcare insurance is put in place in October 2014.

In fact, Dubai is truly unique in that most hospitals in the GCC receive the vast majority of their revenue from the traditional Fee-For-Service or FFS model, whereby patients pay out-of-pocket for medical services. This is not the case in Dubai where most of the revenue for private sector hospitals comes from private health insurance reimbursements.
The promise of private investment in GCC healthcare is highlighted by the recent success of Abu Dhabi based Al Noor Hospitals Group and NMC Health, which as of the writing of this article, are both trading favorably on the London Stock Exchange with attractive P/E ratios of 23.37 and 18.69 respectively.
Underlying the ramp up in healthcare services is the growing GCC population, which although youthful (50% of the local GCC population is below 25) is extremely unhealthy. As the quip goes, GCC countries are globally competitive in oil production, the airline industry and diabetes. Diabetes is directly linked to the prevalence of obesity which, depending on the GCC country, plagues between 30 to 66% of the population.