Wednesday, 14 May 2014

Profiting from growth in online Arabic content

As the number of active internet users among the world’s 630 million Arabic speakers grows and consumers in the Middle East demand more relevant and locally produced original material, global online media leaders like Google and CNN are investing substantially to boost Arabic‑language online content.

Launch of Arabic domain names will boost online content

By Peter Feuilherade

This article was first published in The Middle East magazine, London, May 2014 issue.

A report by the global consultancy Booz & Company estimates that the number of active Arab internet users will rise to 13 million by 2014, compared with 10 million in 2012. The study also reveals that around 37% of internet users in the MENA region are not satisfied with the availability of Arabic websites.

Google notes there has been a great improvement in Arabic online content creation in the last two years. However, Arabic content still comprises only about 3% of overall internet content, and there is “a huge gap between the number of people who speak Arabic and the amount of content available online,” according to Maha Abouelenein, head of communications at Google for the MENA region.

CNN recorded a 70% increase in unique users and visitors to its Arabic‑language portal,, during 2013.

Al‑Jazeera, MSN Arabia and BBC Arabic are also driving growth in Arabic-language news content. Meanwhile internet giant Yahoo’s Middle East portal, Yahoo Maktoob, has revamped both its Arabic and English content. It promises extensive football coverage in the run‑up to this year’s FIFA World Cup in Brazil, including exclusive analysis from Chelsea manager José Mourinho, Yahoo’s “football ambassador” signing for 2014.

The growth potential for content in Arabic is immense, and the arrival and spread of Arabic domain names will be a major boost.

The first Arabic top-level domain name, meaning “web” and transcribed in English as “shabaka”,  was approved for use in March 2013 by California-based ICANN (the Internet Corporation for Assigned Names and Numbers), the global authority which manages the world’s domain names and IP numbers. Shabaka became generally available in February 2014, in the anticipation that it will stimulate a new phase for Arabic content online.

dotShabaka Registry is a Dubai-based internet technology company behind the new domain name. Yasmin Omer, general manager of dotShabaka Registry, explained that while previously search engine users had to type in English and use web translation to get into Arabic websites, with the introduction of .shabaka, they could now type in Arabic and get directly into Arabic content. “There is no better way for businesses to demonstrate their affiliation with the Arabic language online than by registering a domain name," Omer told the Abu Dhabi newspaper The National.

As the market for online content in Arabic expands, a growing proportion of the content is appearing in video rather than text form.

According to a March 2014 survey from Jordan-based Startappz, an app developer and digital advertising agency, about 93% of the videos produced in the Middle East are in Arabic. Technology and gaming, news, music and comedy are all popular categories.

Content producers on Google-owned YouTube are rushing to meet the demand for Arabic content. With four billion views globally per day and a billion unique visitors per month, YouTube launched its monetization policy in 2013 in the UAE, Saudi Arabia and Egypt. This allows users to earn money from content uploaded.

"We have 310 million views a day and have two hours of video uploaded every minute and most of it is in Arabic," said Diana Baddar, YouTube video partnerships manager for MENA. “We also have the second largest presence in the MENA region after the US and have thousands of creators creating content in Arabic, which is diverse and popular.”

Top categories for videos produced in the Arabic language “are across general entertainment like comedy, music and movies”, according to Google.

Although YouTube offers only visual content, the site could be significant in adding to the overall online content in Arabic. “General Arabic content, regardless of where it came, is a plus. It is the right step in increasing Arabic content,” said Dr Fayeq Oweis, a language services manager for Google.

But analysts point out that increasing digital content does not simply mean creating more websites and mobile apps in Arabic. High-quality content is also required from producers in ‘traditional’ industries such as writers, film makers, game publishers and government bodies.
Education and learning, information services, entertainment and gaming, and social media are seen as among the most profitable sectors. A report by the US market research firm Ambient Insight forecast that revenues for self‑paced e‑learning products in the Middle East would reach US$ 560 million by 2016, with the public and private academic institutions comprising the region’s biggest buyers.

Another area to benefit from the expansion of Arabic content is the Middle East’s e‑commerce market, in which the UAE, Saudi Arabia and Qatar are the current leaders. A study by PayPal forecasts that e‑commerce across the MENA region will grow to US$ 15 billion by 2015, with 10% of transactions done via mobile devices. The Gulf has some of the highest rates of smartphone penetration in the world, with the UAE close to 200%, closely followed by Saudi Arabia.

Annual revenue on smartphone applications in the Middle East is predicted to reach more than US$ 200 million by 2015 as demand for Arabic‑language applications increases.

In March 2014 the Dubai-based e‑commerce site raised US$ 75 million in funding from the South African media conglomerate Naspers. Souq will invest part of this funding on developing its mobile technology, as its founder and CEO Ronaldo Mouchawar is adamant that the high mobile penetration rates in the GCC region are providing a major boost to e-commerce.

The deal for a stake in valued the company at more than US$ 500 million. A Wall Street Journal commentator described it as “another milestone for e-commerce in a region traditionally averse to transacting online”.

Although the private sector has been the driving force behind most Arabic content produced in the region, multimillion dollar projects to expand electronic government (e‑government) have also created opportunities for content developers. Again, the lead is coming from the GCC states. All six member countries operate their own e‑government portal. They are now in transition to the next stage, which will see the rapid expansion of the provision of public services over smartphones and similar mobile devices.

Finally, another massive expansion of Arabic content is expected to flow from the various “smart city” projects that have been launched in the Gulf in recent years: six in Saudi Arabia, three in Qatar and two in the UAE: Masdar City in Abu Dhabi and Smart City Dubai.

New inter-city trains herald rail renaissance for Iraq

Investment in new Chinese-made inter-city trains, as well as modern train control and communication systems, signal the Iraqi government’s intention to rebuild the once impressive state‑run railways.

Chinese-made train for Baghdad-Basra route

By Peter Feuilherade

This article was first published in The Middle East magazine, London, May 2014 issue.

2014 marks the centenary of Iraq’s railway network. German engineers laid the foundations during the Ottoman Empire in 1912, as part of the planned Berlin-Istanbul-Baghdad Railway. The line was completed in 1914, connecting Baghdad with the town of Dujayl, 60 km to the north. By the late 1990s, the network was handling some three million tonnes of freight and 2.8 million passenger journeys a year.

Now Iraq’s railways, like much of the transport infrastructure, are dilapidated after decades of neglect and war, and in urgent need of repair and expansion. Most freight is transported by road.

The assets of Iraqi Republic Railways (IRR), owned and operated by the government, include about 2,850 km of track, some 127 stations, 131 locomotives and 1,900 units of rolling stock.

Several lines are still in use, from Baghdad to Basra, Samarra and Fallujah, and Mosul to Rabia, among others, providing a mix of passenger and freight services.

Upgrading the network and restoring other lines are priorities in the government’s reconstruction efforts. However, railway company officials cited by Reuters news agency admitted in 2013 that the volumes of passengers and freight carried did not generate enough income to cover employees' salaries, let alone revamp the network.

The delivery of the first of a fleet of 10 Chinese-made inter-city trains in February 2014 marked a major step forward in the plan to restore and develop Iraq’s national railway system. The contract is worth US$ 115 million, and each train will comprise two diesel power cars and eight steel bodied trailers. The trains will run on the Baghdad-Basra route at speeds of up to 160 km/h. They will have a capacity of 343 passengers in air-conditioned seated and sleeping accommodation, with catering facilities and on-board entertainment. The trains have been designed to function in the high temperatures and wind-blown dust of Iraq’s desert environment.

In 2012 IRR finished building a 32 km line between Mussayab, south of Baghdad, and the holy city of Karbala to transport hundreds of thousands of pilgrims during Shi’i religious festivals.

The company has also invested US$ 60 million in a state of the art computer based train control and microwave communication system.

Regional transit hub

IRR plans to rehabilitate some 300 km of railways in central and southern Iraq, build other lines in major cities to link them to the national network, and construct a metro system with 14 stations in Baghdad.

Iraq also aspires to become a transit hub for goods that would be shipped from Asia to Iraq's neighbours and beyond, by connecting to the planned US$ 16 billion GCC railway network (due for completion in 2018), transporting freight to Europe via Turkey.

A vast project under way at the port of Faw in southern Iraq is seen as having global strategic significance. Planned rail routes will take freight from Asia, via Faw and other Iraq ports, through Zakho in Iraqi Kurdistan and on to Europe via Turkey, bypassing the Suez Canal and reinforcing the importance of the Middle East as a major hub of international commerce.

On a regional level, negotiations continue intermittently to establish rail links with other neighbours like Turkey, Jordan and Iran. The expansion of Jordan’s container terminal at the port of Aqaba includes plans for direct rail access to Iraq. A new line is also planned from Basra to Khorramshahr in Iran’s Khuzestan province.

Iraqi Republic Railways estimates that if its planned rail projects were completed at an estimated grand total of more than US$ 60 billion, some 25 million tons of goods could eventually pass through Iraq every year.

However, specific funding has yet to be committed, and financing on such a large scale is unlikely for the time being. In recent years annual allocations by the government for railway projects have not exceeded US$ 200 million.

Nevertheless, Iraq's economy is growing strongly as it has the world fourth largest oil reserves and is one of the fastest-growing suppliers to global oil markets. The International Monetary Fund expects oil exports to increase to US$ 152 billion in 2018, while according to the Economist Intelligence Unit, Iraq’s economic growth will be over 9% on average in 2014-18.

But while in the long term Iraq could well afford to spend the billions of dollars required to revamp its railways, other problems need to be overcome before the rail sector can flourish again. Many traders prefer to transport their goods using private road haulage companies, who offer door‑to‑door services while most train stations are far from city centres. And the volatile security situation in parts of Iraq makes foreign companies wary of signing up to joint rail ventures

Future spending on railway reconstruction and development in Iraq is likely to be far lower than the hundreds of billions of dollars that its GCC neighbours are investing in an integrated railway network as well as light rail and urban metro projects, as they diversify their economies away from oil and gas and also position themselves as regional transport hubs.

But project opportunities in Iraq’s rail sector could still add up to dozens of billions of dollars. As well as the supply of track, rolling stock, signalling and maintenance equipment, “investment in supporting facilities such as inter-modal container terminals and corporatization of operations under a unified management contract continue to be areas of interest for Iraq’s rail system,” according to a 2013 US government guide to Doing Business in Iraq.

Personal systems herald "smart mobility"

New systems will introduce personalized modes of transport in urban areas

Automated or "self-driving" personal transport systems are no longer the preserve of science fiction. They are now up and running at several locations around the world. IEC standardization work will prove instrumental in the expansion of systems that use innovative pod-type vehicles as well as for two- and three-wheeled "personal transporters".

By Peter Feuilherade

Driverless pod in service at Heathrow airport

This article first appeared in the March 2014 issue of e-tech, published by the International Electrotechnical Commission (IEC), Geneva

Personal, rapid, clean and safe

Small self-driving electric powered vehicles running on dedicated guideways and designed for on-demand use by individuals or small groups, typically four to six passengers, are often referred to as PRTs (personal rapid transit systems).

PRTs are intended to combine the convenience and privacy of cars with the environmental benefits of mass transit. Their primary aims are to achieve optimum door to door mobility, improve safety, reduce environmental impact and lower operational costs.

They are part of the advance towards a new era of "smart mobility" in which infrastructure, methods of short distance transport, passengers and goods will be increasingly interconnected, especially in urban areas.

PRTs operate on networks of specially built guideways, with traffic controlled by a central computer to eliminate collisions and minimize congestion.

They are usually powered by onboard batteries recharged at stops, and guided by GPS (Global Positioning System) to destinations selected on touchscreens. Conventional steering can be used on a simple track consisting only of a road surface with some form of reference for the vehicle's steering sensors.

The oldest system similar to a PRT has been in operation since 1975 in the US city of Morgantown, West Virginia. Comprising cars which hold about 20 passengers and run on a ground-mounted rail, it is more properly described as "Group Rapid Transit".

Pod systems in operation

Driverless electric pods used in Masdar City

Worldwide there are currently two fully operational PRT systems: at Heathrow Airport near London and Masdar City near Abu Dhabi, UAE (United Arab Emirates).

The driverless pod service at Heathrow, operated by UK company Ultra Global, was launched in May 2011. The system comprises 21 pods running at a maximum speed of 40 kph along guideways on a 3,9 km route between Terminal 5 and a business car park; up to 100-120 vehicles can be dispatched every hour.

The pods are powered by electric motors and use Lithium ion (Li-ion) batteries which recharge when parked at stations, bypassing the need for electrification along the track. The batteries provide an average 2 kW of motive power, and add only 8% to the gross weight of the vehicle.

The pods have onboard computers and are guided by laser sensors. Passenger information is updated on LCD screens in the pods, and a wireless communication system allows for two-way exchange of data and commands between vehicles and central control.

Passenger safety measures include continuous CCTV and black box monitoring of all pods; an independent "Automatic Vehicle Protection" system that protects against pod collision on the guideway; safety interlocks between the brakes, motor and doors; and emergency exits, smoke detectors and fire extinguishers fitted in all pods.

A complete pod system like the one at Heathrow, including guideway, stations, vehicles and control systems costs somewhere between USD 7 million and USD 15 million per km to construct, according to the system's operators. They say the pods have saved over 200 tonnes of CO2 per annum and reduced the number of bus journeys on the airport's roads by 70 000 a year.

Heathrow Airport Limited’s business plan for 2014-2019 includes plans for another PRT system linking Terminals 2 and 3 to their respective business car parks.

As part of a GBP 75 million UK government scheme to enable businesses to make and test low carbon technologies, trials of driverless cars will start in Milton Keynes, a so-called "new" town 80 km north of London which was built on a "grid plan" in the 1960s.

The specific technology has not yet been announced but plans are for an initial batch of 20 driver-operated pods able to carry two passengers to enter service in 2015, followed in 2017 by 100 fully autonomous (driverless) pods that will run on pathways alongside but separated from pedestrian areas. The vehicles will be able to travel at up to 19 kph and will be equipped with onboard sensors that will enable them to detect and respond to obstacles.

The driverless electric pods used in Masdar City near Abu Dhabi have carried more than 820 000 passengers since the system, designed by Dutch company 2getthere, was launched in November 2010.

Masdar City is an initiative by the UAE government to build a new small city based on renewable energy and developed around green technologies, including public transport

The pods run at 25 kph and are powered by lithium phosphate batteries, which are charged using solar energy. They travel on tracks equipped with embedded magnets placed every 5 m which the vehicle uses, along with information about wheel angles and speed, to determine its location. Pods designed to carry freight also operate at the site.

Feasibility tests in other countries

Other countries examining the feasibility of PRT systems include Taiwan and Brazil. In Florianopolis, a provincial Brazilian city in which large parts of the city are laid out on a coastal island while the remainder of the city is on the mainland, car traffic between the two is served by a single bridge, leading to peak time bottlenecks. The local authorities are mulling over using PRT as a local distribution network within the dense central business district situated on the island, as part of a multimodal transport proposal that would include ferries and monorail.

In Singapore, NTU (Nanyang Technological University) and French company Induct Technology are collaborating on tests of a driverless electric shuttle vehicle powered by lithium polymer batteries and capable of carrying 8 passengers at a maximum speed of 20 kph. The vehicle uses laser mapping and sensors to manoeuvre, runs on a predefined route and recharges at docking stations. It serves as a testbed for new charging technologies such as wireless induction and new super capacitors for electric vehicles.

Other personal urban mobility prototype vehicles have been demonstrated in recent years but never put into production. They include self-driving pods unveiled by the US multinational General Motors Company in 2010. Powered by electric motors and with a range of 65 km, the two-seater vehicles were crammed with technology including roof mounted GPS, Wi-Fi, vehicle to vehicle communication systems, front-mounted ultrasonic and vision systems and collision avoidance sensors.

IEC makes safety top priority

The top priority in the operation of automated public transport networks is to ensure provision of the highest levels of safety while not restricting the introduction of new technology. Such networks depend heavily on computer-based management, control and communication systems.

The IEC TCs (Technical Committees) whose activities cover automated public transport systems and personal transport pods include TC 9: Electrical equipment and systems for railways, TC 21: Secondary cells and batteries, and TC 47: Semiconductor devices, and its SCs (Subcommittees).

TC 9: Electrical equipment and systems for railways, is responsible for International Standards relating to the systems, power components and electronic hardware and software used in fully automatic transport systems operating in the wider context of urban rail and metro transport (see article on TC 9 in this e-tech). This includes safety aspects such as passenger alarm systems and automatic system surveillance. TC 9 works in liaison with other relevant IEC TCs, for example, coordinating with TC 69: Electric road vehicles and electric industrial trucks, on the development of double-layer capacitors for energy storage, and with TC 56: Dependabilty, which covers the reliability of electronic components and equipment and is included as a characteristic of quality.

TC 21: Secondary cells and batteries, prepares International Standards for all secondary cells and batteries. This covers the performance, dimensions, safety installation principles and labelling of batteries used in electric vehicles.

TC 47 and its SCs prepare International Standards for semiconductor devices used in sensors and MEMS (micro-electromechanical systems) installed in personal transport systems.

Driverless vehicles approaching

Existing PRT networks, albeit small-scale, combine the advantages of flexibility in terms of planning available with individual means of transport with those of urban public transport systems. They have proved safe, reliable and environmentally friendly and offer a feasible public transport option for tourist attractions, business parks, hospitals and university campuses. They could also be one way forward for "last mile" solutions in urban environments, although the density of traffic in cities would pose more complex and diverse challenges than, for example, in an airport setting.

Consumers would pay a fraction of the cost of buying and running an individual car, while building dedicated trackways would be much cheaper than the cost of most traditional transport infrastructure.

As the Heathrow system's operator told e-tech in an interview, "an innovative and now proven technology that responds to patrons' desire for on-demand, direct and personal transport should be seen not only as a viable but altogether a more economically, socially and environmentally beneficial alternative to conventional forms of public transport".

The wider significance of driverless pod networks is that they are part of a long term trend in the car industry to develop autonomous vehicle control systems equipped with a combination of sensors and dedicated software for the personal mobility sector.

Tests on autonomous cars have already begun. As well as the Milton Keynes trial set for 2015, NTU in Singapore has tested a driverless electric vehicle on a 2 km shuttle route, while autonomous electric cars have also been tested on roads in Japan. In the US, the technology giant Google has been licensed to experiment with driverless vehicles, and says that in tests its cars have logged about 500 000 km without an accident. And in 2017 the Swedish city of Gothenburg will start a pilot project with 100 cars and 100 regular drivers who will manually drive cars to roads where they then join road trains and switch to autonomous driving.

Software will be crucial to autonomous travel, not only to calculate a vehicle's position and route from a constant stream of incoming data, but also to react to unforeseen obstacles.

However, it could be decades before passenger cars driving autonomously win consumer and government acceptance to reach the mass market. One way to help promote autonomous driving would be to incorporate technologies such as coordinated traffic lights and smart parking systems in the design of smart cities.

The US based market research and consulting firm Navigant Research forecast in August 2013 that sales of autonomous vehicles would rise from fewer than 8 000 annually in 2020 to 95,4 million in 2035, representing 75% of all light duty vehicle sales by that time. In addition to advanced driver assistance features now available in some vehicles, such as adaptive speed control, automatic emergency braking and lane departure warning, new features that could assume control of more aspects of driving would be introduced gradually, Navigant predicted.

"The first features will most likely be self-parking, traffic jam assistance, and freeway cruising – well-defined situations that lend themselves to control by upgraded versions of today’s onboard systems", said David Alexander, senior research analyst at Navigant Research.

Personal transporters - flexible use for multiple applications

 Personal transporters can be used for indoor, sidewalk, cross-terrain and patrol use

Electric stand-up personal transporters (like Segways and their one or two-wheeled derivatives, or alternative machines such as Roboscooters) are devices that are controlled by the body movements of the driver and are equipped with self balancing mechanisms

They are also available as personal scooters in three-wheeled configurations, which offer greater stability and the option of riding seated on larger models. These vehicles are generally powered by Li-ion batteries, removable on some models to allow longer operational cycles. Some versions may include regenerative braking capability, allowing batteries to recharge during deceleration.

Stability is maintained using a combination of computers, tilt sensors, gyroscopic sensors and motors that rotate the wheels forwards or backwards as required for balance or propulsion.

Personal transporters target the individual consumer market for urban commuting or leisure, as well as corporate users including police forces, security firms, ports and airports, factories, shopping centres, campuses, sports stadiums and amusement parks.

Manufacturers in the US estimate the operating costs of three-wheelers used in police patrol duty to be around USD 0,10 per day.

Middle East healthcare spending surges as demand soars

Healthcare is a major growth area in the Middle East, with public and private investment in the sector forecast to exceed US $150 billion in 2016. In the GCC in particular, governments are allocating ever‑increasing budget shares to healthcare, to meet soaring demand fuelled by high population growth rates, longer life expectancy and the extension of compulsory health insurance, as well as the spread of lifestyle diseases and chronic illness. 

Private hospital in Jiddah, Saudi Arabia

By Peter Feuilherade

This article was first published in The Middle East magazine, London, April 2014 issue

Former British health minister Lord Darzi, a keynote speaker at the January 2014 Arab Health Exhibition in Dubai, noted that the Middle East has some of the highest per capita levels of obesity and associated chronic illness like diabetes and cardiovascular disease. “It has a rapidly changing demography, both in terms of population growth and an increasing life expectancy. These are necessitating an increased level of spending on healthcare and the rapid expansion of provision. There is also a heavy reliance on imported human and material healthcare resources; and a significant level of overseas spending on healthcare due to a lack of local specialist healthcare provision,” he added.

International healthcare technology providers like General Electric Healthcare and Philips, whose US and European sales have dipped because of budget constraints, are hopeful of double-digit percentage growth in the Middle East, not just in the established markets of the GCC but also in emerging or post‑conflict markets like Iraq.

Across the Middle East and North Africa (MENA) region, non-communicable diseases like obesity, diabetes and cardiovascular diseases are widespread, while smoking‑related respiratory diseases are on the increase. The scale of the health challenges is vast. Cardiovascular disease is responsible for 45% of deaths in the Middle East; four GCC countries are in the global top 20 for obesity; and there is a high and rising incidence of major depressive disorders and anxiety.

A September 2013 survey by the World Bank and the Seattle-based Institute for Health Metrics and Evaluation found that “potentially preventable risk factors such as poor diets, high blood pressure, high body mass index (an indicator of obesity and overweight), and smoking are contributing to the growing burden of non-communicable diseases in the region.” Another factor is lack of exercise, particularly among women.

At the same time, poorer Middle East countries, including Iraq, Yemen and Djibouti, continue to struggle with a high level of communicable diseases, while the outbreak of polio in Syria has prompted a massive immunization campaign across the Middle East.

Saudi “bonanza” for foreign firms

GCC governments are making significant investments to meet growing demand for healthcare and bring the sector up to international standards. Saudi Arabia, whose economy and population make up approximately half that of the GCC states collectively, is seen as leading the way.

Total healthcare expenditure in the six GCC states is expected to rise to US $79.2 billion by 2015, while the GCC’s combined pharmaceutical and healthcare market is set to exceed US $133 billion in 2018, according to the Frost & Sullivan business consultancy.

Although GCC healthcare spending is expected to increase at a compound annual growth rate (CAGR) of 11.4% until 2015, a shortage of medical graduates and other skilled staff is making countries heavily dependent on expatriates to fill healthcare jobs and poses a big challenge to be tackled, global consultants Ernst & Young note.

Recruitment ad for Saudi private hospital

A growing number of GCC governments are also enforcing mandatory medical insurance.

In response to discontent about overcrowded hospitals and shortages of medicine, healthcare infrastructure in Saudi Arabia is accelerating at a rapid rate, funded by an annual healthcare budget of US $27 billion. Stock market listings planned by two of the Kingdom’s biggest private hospital operators reflect the boom in its healthcare industry. Several new healthcare cities are under construction, and the number of hospitals is expected to increase by more than 100 within the next three to five years.

According to Reuters, “this could make Saudi Arabia the world’s fastest-growing major healthcare market over the next few years, helping to diversify the economy beyond oil and providing a bonanza to foreign companies selling medicines, equipment and services.”

In the UAE, Dubai’s recent move to make health insurance mandatory for all workers would be a catalyst for private investment in the emirate’s healthcare sector, in the same way that a similar law in Abu Dhabi was in 2005, said Michael Bitzer, CEO of Daman, the UAE’s largest health insurer with over 2.4 million subscribers.

The law will make employers responsible for providing at least an “essential benefits package” for every worker and will come into effect in several phases by 2016, said the Dubai Health Authority. The government will remain responsible for the coverage of local citizens, who are estimated to make up less than a fifth of the population.

The UAE’s healthcare budget is around US $12bn, and spending on healthcare as a percentage of GDP is the third highest in the Gulf at around 3.3%, after Bahrain and Saudi Arabia. About 36% of UAE hospitals are owned and operated by the Ministry of Health, while the private sector catered to 64% of the whole population in 2011.

According to the Oxford Business Group, medical tourism in Dubai looks set to grow beyond the US $1.69 billion in revenue earned in 2012, and a number of health and pharmaceutical groups are eyeing Dubai as a regional centre, owing to its well-developed transport and communication links and continuing advances in technology and research.

Qatar is set to launch the second phase of its compulsory health insurance scheme in April 2014, when all Qatari citizens will be brought under the new system. And Oman, which built its last major hospital 20 years ago, plans to open the first phase of a US $1 billion International Medical City in Salalah in 2016. A population expanding at 4% a year is putting increasing strain on healthcare in the Sultanate, despite a 32% increase in the sector’s budget from 2012 to 2013.

“Strong returns” for private equity

The growing number of mandatory health insurance programmes in the GCC is increasing reliance on the private healthcare sector. Across the wider MENA market, private equity firms see significant room for expansion, particularly in services such as long-term care, specialized care and rehabilitation.

“Experienced private equity investors know that the MENA healthcare sector presents significant opportunities and strong returns for those who can get the balance right, by bringing international experience and global insight to the local market,” argues Dr Helmut M. Schuehsler, chairman of TVM Capital Group, a European private equity fund. He points out that because individuals from the MENA region spend US $15 billion a year travelling abroad for medical care, “governments and private companies will both benefit from providing more focused, high quality care locally”.

To meet rising expectations across the Middle East for expanded and better quality health services that are on a par with international standards, expenditure on healthcare as a percentage of GDP will need to be raised further. Training local doctors and medical staff and establishing research and clinical trial centres in the region should also become a top priority.