Healthcare Investment Opportunities in Bhutan and Way Ahead
Bhutan, a Buddhist country with a population of little over 750,000 people, is located between China and India. Bhutan has made significant progress over the course of 12 Five Year Plans (FYPs), which are now slated until 2023, after a lengthy period of underdevelopment. Bhutan is well-known for employing the Gross National Happiness Index. Every Five Year Plan explains what adjustments the country must make and what priorities it should set in order to optimize the GNH index. Bhutan’s whole government, including its healthcare system, is dedicated to boosting national happiness and well-being. Bhutan has a universal free healthcare system, which it funds with around 3.5 percent of its GDP.
Healthcare Snapshot of Bhutan
The Bhutan healthcare sector comprises of hospitals, clinics and diagnostic centres. Health services are free as enshrined in the Constitution of Bhutan. Therefore, government revenue is the predominant source of health financing. Total health spending as a percentage of GDP has been stable over time, at roughly 4%, with the government accounting for 70% of current health spending in 2016.
The public sector dominates the healthcare business, through 49 hospitals including the National Traditional Medicine Hospital (NTMH), 186 Primary Health Centres, 53 Sub-posts, 542 Outreach Clinics (ORCs), three Thromde Health Centres, and five Health Information and Service Centres. The private sector in health has a limited role in Bhutan. There is no private hospital in the country; currently, 14 chosen diagnostic health centres are located in the country’s largest cities.
Bhutan’s Economy
Bhutan’s economy, one of the world’s smallest and least developed, is centred on agriculture and forestry, which provide a living for more than 60 percent of the people. Agriculture consists mostly of subsistence farming and animal husbandry. Over the last few decades, socio-economic progress has greatly reduced the number of people below poverty line, increase in GDP per capita and improvement in living standard. According to the World Bank, Bhutan has managed an annual average economic growth of over 7% in the past decade. Further, according to the Asian Development Bank, Bhutan is one of the emerging economies in the region.
Bhutan’s Royal Government has launched a variety of economic growth and diversification measures in order to strengthen its economy and play a more active part in the global economy. One such project is the Royal Government’s determined effort to attract Foreign Direct Investment (FDI) by liberalising the FDI system, modernising its economic strategy, and establishing a favourable investment climate. With the implementation of the FDI Policy in 2002, FDI commenced. In addition, the policy and regulations were changed in 2010 and 2019 to reflect changing demands and situations.
Recent Healthcare investments in Bhutan
Bhutan has a plethora of investment prospects in a variety of areas, including manufacturing (agro/forest/water-based) and service (education, health, hotel and resort, ICT, construction, infrastructure facilities, etc).
Azista Bhutan Healthcare Ltd (ABHL)
Azista Bhutan Healthcare Ltd (ABHL) is a joint venture company of Azista Industries Pvt. Ltd. (AIPL), Hyderabad, India and Druk Holding and Investments Ltd. (DHI), Thimphu, Bhutan with shareholding of 72% and 28% respectively.
ABHL is a first full-fledged pharmaceutical plant that manufactures, packages and distributes a wide range of allopathic and oncological drugs. Given the rising demand for pharmaceutical products in both the domestic and international markets, as well as the fact that Bhutan has been importing all allopathic drugs from abroad, DHI took this initiative not only to reduce imports but also to promote the brand Bhutan in a global market through the export of locally manufactured quality pharmaceutical products.
The plant is located at Motonga Industrial Park, Samdrup Jongkhar, Bhutan. Once operational, the firm will manufacture, package, and distribute 99 different types of goods across 17 key treatments. The facility will not only fulfil domestic demand for pharmaceutical items, but it will also export to India and other countries. The construction works are under progress.
Investment into Hospital Information Systems (HIS)
The Government of Bhutan has accorded high priority to information and communication technology (ICT). As such, the government is in process of developing the eHealth Strategy and Action Plan, in line with the overall objectives and program of the 12th 5-year plan and with the e-Gov policy of the Ministry of Information and Communications.
The government’s overall financing for strengthening of the HIS in the 12th 5-year plan is projected to be $17 million. The amount will cover government spending in areas such as infrastructure, services and applications, standards and interoperability, and e-health workforce capacity building to establish an interoperable structure for more efficient and quality delivery of health services.
Support from Asian Development Fund
Bhutan received $13.3 million from the $52.8 million grant facility set aside under Asian Development Fund (ADF) 12 for projects and programmes related to regional health security because its health information management systems require improvement and its technology and data standards differ greatly.
The ADF facility and additional ADF grant money totaling $20 million are helping to improve primary health care delivery and information systems under the Health Sector Development Program. It is also improving the country’s disease monitoring systems and policies in order to assist Bhutan and the region in preparing for and managing pandemics.
Conclusion
Over the last decade, socioeconomic progress has greatly reduced the number of people living in poverty, raised GDP per capita, and improved living standard in Bhutan. According to the Asian Development Bank, Bhutan is also one of the region’s fastest developing economies.
Attractive FDI Policy
Bhutan’s Royal Government has launched a variety of economic growth and diversification efforts in order to strengthen the country’s economy and make it a more active member in the global economy. The Royal Government’s determined attempt to attract Foreign Direct Investment (FDI) through liberalising FDI regulations, modernising its economic strategy, and establishing an acceptable environment is one such endeavour.
Increase in FDI Projects
Up till date, Bhutan has been able to receive 83 FDI projects. In terms of the overall FDI distribution, the service sector—comprising hotel, IT and IT-enabled services—dominated Bhutan’s FDI inflows, followed by manufacturing, dairy and agro projects.
Indian Advantage of Investing in Bhutan’s Health Sector
With such an objective, the Bhutanese government is liberalizing its FDI laws and sectoral cap to make the nation an attractive investment destination. Because of it’s proximity ot India, Bhutan is keen to attract Indian investors in areas like generation of hydel power, information and communication technology, health, hospitality, agriculture and infrastructure. The Bhutanese government has approved 10 Foreign Direct Investment (FDI) projects amidst the COVID-19 pandemic last year. According to the FDI annual report 2020, five of the projects are in the manufacturing sector and the others in the service sector. India remains the major source of FDI investments in the country with 47 percent of investments.
For more information about the Country and Healthcare opportunities in Bhutan, you can visit the company website on www.hospaccxconsulting.com or contact us directly.
