By: M. Javedanfar

20/07/2005

According to the Jordanian state run news agency (Petra) last week Libya finally removed a thorn from the side of the Jordanian – Libyan relations. The point of contention was around the $25 million owed by Libya in unpaid medical bills.

According to Petra each year 13000 Libyan Health Tourists visit Jordan. Most people on such visits are sponsored by the Libyan government who is supposed to pay for their medical and hotel bills. The aforementioned number of Libyans is only a part of the growing health tourism sector of the Jordanian economy.

The health industry in Jordan is designated by the Jordanian government as one of the important foreign exchange earning industries of the Jordanian economy.

This is due to a number of reasons.

According to Jordanian sources, the Kingdom has 53 private hospitals which hold a total of 4,500 beds. The bed occupancy rates at the hospitals stands at 55% which means that there is plenty of capacity to host extra patients from abroad.

Jordanian Doctors and medical schools have a very high reputation in the Arab world. This is due to government investment in Jordan's universities, plus the fact that the syllabus of Jordan's medical education is based on that of the United Kingdom due to the fact that a large number of Jordanian doctors were trained there.

Jordan's stable political environment, Arabic language, good relations with other Arab countries and advanced health facilities which provide services at lower costs make it an ideal destination for health visitors from Arab countries.

In order to encourage the growth of this sector in the year 2000 J ordan's Health ministry issued a standardised list of fees for treatment of Arab patients and distributed it to all Arab health ministers and ambassadors. As a result all charges for examinations, tests, surgeries and other treatments are public. This information makes the hospitals compete for the custom of the health tourists, thus giving the consumer wider choice and more competitive pricing.

So far the results have been promising. Last year Jordan attracted close to 120,000 health visitors. Majority of the visitors were from Yemen, Sudan and Libya. According to a number of estimates visiting health Tourists spent close to $800 million dollars in Jordan last year, thus contributing a total of 3.2% to Jordan's total GDP of $25.5 billion.

Although this is not a very high figure in itself, nevertheless the Jordanian government aims to increase its income from this sector to $1 billion for the year 2005 and more each year after that.

The growth and development of the health sector in Jordan is also aimed at supporting the growth of the Pharmaceutical sector of the Jordanian economy.

Jordan's pharmaceutical sector comprises of 17 companies whose combined working capital stands at approximately $600 million USD.

Jordan's pharmaceutical products are exported in their majority (approximately 60%), whilst the rest are consumed for local purposes. Local consumption has increased recently due to increasing number of health visitors to the Kingdom.

The Jordanian government is actively encouraging growth of the Pharmaceutical sector of the Jordanian economy due to the following reasons:

• To increase export generated income. Estimates point close to $200 Million USD worth of Jordanian Pharmaceutical exports for the year 2004.
• To increase employment opportunities for Jordanian citizens . The Jordanian Pharmaceutical sector employs 8000 people directly and indirectly.
• To create new markets and demand for the Jordanian health industry. It is expected that export of Pharmaceutical products to wealthier markets such as that of the Persian Gulf countries will make health patients in those countries aware of Jordan's sophisticated medical capability to treat patients and to produce the right medication for them.

With Jordan's entry to the WTO, the Jordanian government expects for its pharmaceutical industry to expand.

In a bid to attract investors to its Pharmaceutical industry Jordan has issued new laws and regulations protecting the Intellectual Property Rights of Patents.

According to a recent report by the Jordanian government, currently most Jordanian pharmaceutical products concentrate on reproduction of patents.

Jordan lacks the capital and market for the development of new patented drugs, as a result Jordanian companies are looking for partnership opportunities with foreign companies.

The Jordanian government also intends to use investment in this sector in order to enable it to turn Jordan's pharmaceutical sector into a research-based industry, thus enabling it to produce higher value patented products.

Current Foreign participants in the Jordanian pharmaceutical industry include the Dutch firm Organon, the U.S.-based Watson Pharmaceuticals and Pharma International.

Jordan's relatively low level of corruption in the world (37th in Transparency international's rankings making it one of the least corrupt countries in the Arab world), low inflation (2%), liberalized economy and investment friendly laws make it an ideal destination for the international investor.

The health and pharmaceutical industries of Jordan are set to expand in the near future due to increasing foreign demand. Local demand is also set to increase due to recommendation for reform of Jordan's health sector from the World Bank, which will lead to increased services offered to Jordanian citizens, especially those from the underprivileged sectors of society. All such factors, plus Jordan's stable political environment make the Jordanian health and pharmaceutical sectors attractive candidates for companies wishing to invest in the Hashemite Kingdom.

End of Analysis

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