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International Development of Health services: North Africa’s Export Prospects


In a recent paper produced as part of a series on North African policies, the African Development Bank (AfDB) analyzes the prospects of exporting the health services available in North Africa.

Accelerated growth and job creation pose major challenges for the countries of North Africa (NAF), which are all facing a rapid increase in their workforce. In the Maghreb, the preponderance of the textile-clothing sector and outsourced automobile-related manufacturing in industry, as well the lack of alternative manufacturing specialization largely contribute to fragility.

In this context, new growth and export targets must be identified. Manufacturing sector prospects are closely linked with the opening up of markets, as well as the Chinese and East Asian competition, while the mining sector activity is, for its part, already intensive.

In contrast, the service sector opportunities seem to be under-estimated. However, several trends point to the existence of sources of competitiveness and growth for the NAF countries in the area of service exports. Of all the international trade segments, services have shown the fastest growth. By 2020, this sector is even expected to account for 50 % of global trade- on account of the considerable reduction in the cost of the transactions allowed as well as information and communication technologies.

Under the title: Development of international trade in health services: Northern Africa’s Export Prospects, this new AfDB publication explores the potential role to be played by the development of health service exports in this context.

This note stresses that the international health services trade has been on the increase since the end of the 90’s. Its share of total world tourism services has increased from 1.2 % in 1997 to 1.5 % in 2010.

The exporters of the South are the most dynamic in this sector. Since 2007, their estimated volume of health service exports has surpassed that of the North. In 2010, the apparent market share of the South stood at 54 %, against 46 % for the North.

In the Mediterranean region, the explicit strategies for promotion of these exports are being implemented by private parties (in Morocco, Libya, Egypt, Tunisia, Turkey), as well as by the public authorities (Jordan, Tunisia), or envisaged by multilateral organizations.

The paper however stresses that, while strong economic complementarity is witnessed between the European demand and the sub-Mediterranean supply, this trade clearly maintains a south-south flow, in accordance with the “neighbour principle” noted in other regions of the world. The policy and institutional changes underway in North Africa will without doubt have a decisive impact on the evolution of the regional health services trade.

For the short term, the instability of certain countries of the region has resulted in fragilized health systems and turned patients towards other territories. For the medium term, the international competitiveness of the health sector offers opportunities for consolidation of the tourism sector and/or diversification of the tourism offered with regard to wellbeing services, which are attracting a growing share of the European demand (spa treatments, balneotherapy, thalassotherapy, etc.).

Tourism and health service exports are in fact intercomplementary. Tourism activities generate a flow of foreign patients to local clinics and practitioners, and on their return, mainly to Europe, these persons become very effective advocates boosting the image and notoriety of the services.

Tourism thus contributes to reducing the psychological distance between European patients and the local health care supply, and also lowers the psychological cost of travelling abroad. From another angle, the sound international reputation of a health system bolsters the credibility of well-being tourism services offered with enhanced value.   

The paper concludes that the bulk of the European demand for health care remains out of the reach of the service providers of North Africa and the Middle East. However, it cannot be assumed that the institutional impediments with regard to the non-transferability of health insurance are the main explanations for the modest level of North-south trade in the region.

There are indeed other major obstacles to international mobility of patients, especially relating to the specific nature of health sector transaction costs. Before developing ambitious strategies for promotion of exports in this area, the parties concerned must attempt to assess the respective weight of these two categories of trade impediments.

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