Healthcare Investment Opportunities in Pakistan and way ahead
Pakistan is situated in the western part of the Indian subcontinent, with Afghanistan and Iran on the west, India on the east, and the Arabian Sea on the south. In recent study reports, healthcare in Pakistan currently ranks 154th out of 195 countries in terms of overall system performance. As a developing country with a mere 2% of its GDP allocated for total health expenditures, Pakistan struggles to maintain a proper healthcare system with regard to quality and accessibility. Catastrophic health expenditure is an escalating issue in Pakistan where many people cannot afford health care services when these expenditures increase up to a certain level.
Healthcare Snapshot of Pakistan
The health care delivery system in Pakistan includes both state and non-state; and profit and not for profit service provision. Under the constitution, health is primarily the responsibility of the provincial government, except in the federally administered areas.
Public sector health care system endeavours to deliver healthcare through a three-level healthcare delivery system and a range of public health interventions. The first level includes Basic Health Units (BHUs) and Rural Health Centres (RHCs) founding the fundamental of the primary healthcare model, secondary care encompasses first and second referral facilities providing acute, ambulatory and inpatient care through Tehsil Headquarter Hospitals (THQs) and District Headquarter Hospitals (DHQs) and tertiary care including teaching hospitals.
The public health activities have persistently increased in terms of physical infrastructure and workforce. The national health infrastructure comprises 1201 hospitals, 5518 Basic Health Units, 683 Rural Health Centres, 5802 Dispensaries, 731 Maternity & Child Health Centres and 347 TB centres, and the total availability of beds in these health facilities is estimated at 123394. In addition, more than 95000 Lady Health Workers are providing primary health care services to the community through the health houses.
Pakistan’s Economy
The economy of Pakistan is the 25th-largest worldwide in terms of GDP based on purchasing power parity (PPP). According to 2021 estimates, the country has a population of 227 million people (5th-largest worldwide), Pakistan is a developing country with a semi-industrial economy. Primary export commodities include textiles, leather goods, sports equipment, chemicals, and carpets/rugs.
Key Economic Statistics
The nominal GDP of Pakistan stands at US$286 billion with a nominal GDP per capita of US$1,255 (172th worldwide); its GDP based on PPP stands at US$1.11 trillion with a GDP (PPP) per capita of US$4,800 (156th worldwide).
Inflation measured by consumer price index (CPI) is 13% while the country has a Human Development Index (HDI) of 0.557, ranking it 154th in the world. The Ease of Doing Business rank is 108th position in 2020.
Investing in Pakistan
Pakistan offers a business-friendly environment and space for foreign direct investments since it is their way to gear up FDI. The most attractive tax concessions and exemptions are also available to foreign business. The government is working on a multi-year foreign direct investment (FDI) strategy which aims to gradually increase FDI to USD 7.4 billion by Fiscal Year (FY) 2022-23 from USD 2.8 billion in FY2019-20. Foreign Direct Investment in Pakistan increased by 90.80 USD Million in February of 2022
Recent Healthcare Investments in Pakistan
International Finance Corporation Benefits Shifa Hospitals
IFC, a member of the World Bank Group, has invested $11.3 million as equity in Shifa International Hospitals Limited, a leading healthcare company in Pakistan, to help it expand and meet the needs of the country’s fast-growing population.
The investment gives IFC 12 percent equity in Shifa, a publicly listed company that operates one 600-bed tertiary care hospital and two other smaller hospitals, serving about 440,000 patients annually. It will help Shifa set up more hospitals and clinics and provide increased access to high-quality, affordable care. This is IFC’s first investment in the health sector in Pakistan, the fifth most populous country, which has less than one hospital bed for every 1,000 people.
Marham- Online healthcare start-up
Marham, an online healthcare platform in Pakistan is bridging the gap between patients and doctors. Marham can locate nearby doctors, obtain appointments by booking online or utilize online forums for queries, medical assistance and getting a second opinion.
The company has recently raised $1 million in a seed round led by Indus Valley Capital with the participation of Weihan Liew, a serial tech entrepreneur in Southeast Asia. At present, Marham is available in 12 major cities including Karachi, Lahore and Islamabad. It has an iOS and Android app along with a website, allowing doctors and patients to find each other on a click of a button. Marham is on a mission to revive the current healthcare system in Pakistan.
Chinese Companies Investing in Pakistan’s Health sector
Pakistan welcomes investment in the medicine sector. Comprising of 700 plus manufacturers and thousands of distributors, Pakistan’s $4 billion pharmaceutical market has been growing at a pace of 12.5 per cent CAGR.
- Chinese Investment into Pharmaceuticals
CanSino is a renowned Chinese pharmaceutical company that launched the single-dose CanSino COVID-19 vaccine branded PakVac locally produced in Pakistan last year. PakVac is producing more than 3 million doses per month, exceeding the initial expectation of 1 million and cutting the cost by 25%.
- Chinese Partnership in Hospitals
In Pakistan, China is building a hospital called the Pak-China Friendship Hospital project in Gwadar. The project, under the CPEC will be completed in December 2022 at a cost of $100 million. The Chinese government is financing the modern medical facility plan which spreads over 68 acres of land. The project has been proposed for implementation of Phase-II of 50-beds hospital to be constructed under the Gwadar Development Authority (GDA) Business Plan.
The estimated cost of the plan will be shared by the executing company and sponsors including GDA, financing Chinese Government Grant Supervising Agency, Planning and Development Department, Balochistan government and Ministry of Planning, Development and Special Initiatives.
Conclusion
Over the past year, Pakistan has made considerable changes towards moving to a market-determined currency rate and closing its sizable current account deficit, while inflation has been falling steadily since 2020. In the World Bank’s Doing Business 2020 rankings, Pakistan rose 28 places from 2019 to 108th place out of 190 nations. Although Pakistan has been working to improve its business climate, the rating shows that there is still more to be done. For example, progress has been slow in areas like expanding the tax base, overhauling the tax system, and privatising state-owned firms.
The COVID-19 pandemic has had a significant impact on Pakistan’s economy. While the IMF had predicted Pakistan’s GDP growth to be 2.4 percent in FY2020, Pakistan’s economy is now expected to contract by 1.5 percent this fiscal year, which ends June 30.
Better arrangements need to be introduced by the Board of Investment and Ministry of Commerce to develop the global chain system in the country, which will minimise cost of doing business and attract investors.
For more information about the Country and Healthcare opportunities in Pakistan, you can visit the company website on www.hospaccxconsulting.com or contact us directly.
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