Economic Update

Published 22 Jul 2010

Though Dubai may be best known as a regional business and finance centre, with lavish real estate projects and successful forays into the international investment market, the emirate has also moved to make a name for itself in two sectors fundamental to society: health and education.

Over the past decade, Dubai has invested heavily in both sectors in a bid both to meet the needs of the community and as part of the state’s programme to diversify the economy.

The cornerstone in the push to develop the emirate as an internationally recognised health provider is the Dubai Healthcare City (DHCC), a designated free trade zone that combines treatment services, medical education centres and research facilities.

While catering to the needs of both local and overseas patients via an array of clinics, hospitals and wellness centres, the DHCC also includes the Mohammed Bin Rashid Al Maktoum Academic Medical Centre – a $572m educational and research facility that aims to turn out future medical practitioners. The centre – affiliated with a number of international institutions, including Harvard Medical School and Boston University – provides training both to students from Dubai and abroad.

According to Dr Ayesha Abdullah, senior vice president of the DHCC, more than 90,000 people have already visited the facility, with numbers projected to rise dramatically once the DHCC is fully operational in 2011.

Such is the development of the Dubai medical services market that the emirate has become the host for Arab Health, an annual four-day exhibition of health services, technology and sectoral support industries.

This year’s event, which opened on January 26, drew a record 2500 exhibitors from more than 65 countries, making it one of the largest such events in the world, and reflecting the growing importance of the health industry to the economy.

According to Simon Page – director of the Life Science Division for IIR Middle East, the organiser for Arab Health 2009 – the health services industry in the region offers strong potential for growth, and could help Dubai and other Gulf states offset the downturn in other sectors.

“While real estate projects in the region are suffering from the global economic crisis, not even one hospital-related project has yet been cancelled or put on hold as a direct result of the slowdown,” Page told local media on the sidelines of the event.

While investing heavily in the health services sector, Dubai faces competition, with Saudi Arabia investing $6.6bn and Qatar $2.8bn in new medical treatment and training facilities.

Another potential problem for Dubai’s health services sector is a shortage of skilled staff, an issue raised by delegates attending the series of conferences at Arab Health 2009.

Dr Mubashar Sheikh, executive director of the World Health Organisation’s (WHO) Global Health Workforce Alliance, told delegates that Dubai and the other states of the United Arab Emirates (UAE) needed to frame policies to ensure that new facilities are properly staffed.

“The UAE, which has a major shortage, needs to focus on recruiting more staff rather than building new facilities,” Sheikh said.

It is hoped the DHCC’s educational arm will, in time, overcome the domestic shortage as well as turn out trained professionals for other countries in the region and beyond.

Training for the future has become a hot topic in Dubai, with the emirate pouring billions into educational facilities to cater to local and foreign students. While the DHCC is at the heart of Dubai’s health sector aspirations, the Dubai Academic City (DAC) is the focal point of its drive to become a centre of learning. When launched in 2006, the DAC had a projected budget of $3.4bn; its stated aim was to develop human capital and cater to the needs of the different booming economic sectors in Dubai and in the region.

Within the DAC, the Dubai International Academic City (DIAC) – an educational free trade zone aimed at attracting foreign outfits – is the jewel in the crown. Currently, there are more than 30 overseas universities operating out of the DIAC, providing education to some 12,000 students, a figure projected to rise to 40,000 by 2015.

As is the case with the DHCC, there are rivals to Dubai’s educational facilities seeking to cash in on the teaching trade. Abu Dhabi and Qatar are each developing their own education cities, both of which are affiliated with international universities and which are vying with Dubai to attract regional and overseas students.

It is too early to say whether the global economic downturn will affect the short-term development of either the DHCC or the DAC, though financial pressures could induce some foreign students or overseas patients to consider options closer to home. This could cut both ways though, with locals opting for health treatment or education at home rather than going abroad.

Whatever the short-term impact of the financial crisis, in the longer term Dubai is set to be a healthier and wiser place, with the benefits flowing into the economy.