• Pre-Collegiate Global Health Review

Floating On Oil: The Healthcare Crisis of the Gulf Cooperation Council

Rishabh Mehta, Solon High School, Solon, Ohio, USA


When an American-owned drill struck black gold in Saudi Arabia on March 3rd of 1938, the economic, social, and political climate of the Middle East was forever changed. Today, Saudi Arabia is one of the many countries in the Middle East and North African (MENA) region that follows a rentier-state system. In this system, “the state derives most of its revenue from renting resources to foreign powers” (“What Is”, 2021). In essence, this system creates the state government’s reliance upon hydrocarbon sources, such as oil, for most government-related duties. These duties have included, but are not limited to, education, healthcare infrastructure, and the public workforce of nations.

However, Saudi Arabia is not the only country to experience this phenomenon within the Persian Gulf. Kuwait, Bahrain, Qatar, the United Arab Emirates, and Oman all experience this similar economic and social climate. These six nations make up the Gulf Cooperation Council (GCC)—a regional council created to help each nation with its economic, social, and political problems.

To many healthcare advocates within the Middle East, this system poses an essential question: to what extent should GCC governments expand their healthcare expenditure in an attempt to provide sustainable provisions, such as healthcare infrastructure, within their respective nations?

Halal Halaoui, the leader of Strategy&’s public sector practice in the Middle East, gives essential insight into this issue: “GCC states also are the main providers of social services within their respective countries. For example, GCC governments account for nearly 80 percent of healthcare spending, compared to an average of 60 percent in the G20 countries” (Halaoui, 2005). This illustrates the detrimental flaw within the financial structure of the GCC government: they contribute to the majority of spending in healthcare, rather than allowing private companies to handle the expenditure. By doing so, the GCC creates a direct reliance upon the declining success of oil exports to fund the healthcare industry.


Comparatively, the United States’ public expenditure amounts to less than 50% of the total expenditure by the public and private sectors in America (Fullman, 2016). The United States’ predominantly private-funded healthcare system allows for the US to be ranked with a relatively high HAQ index score of 89, which can be compared to countries such as the United Kingdom (90) and South Korea (90). The HAQ index, ranging from 0 to 100, “is based on amenable mortality, defined as deaths that should not occur in the presence of timely and effective care” (Weaver, 2021). Due to the reliance on private expenditure, the United States’ healthcare system has been extremely effective in treating patients across the nation. In comparison, GCC countries lie within a range of a HAQ Index score of 68 to 82. Without an increased presence in the private sector expenditure, GCC countries’ healthcare systems continue to be less effective in treating patients.


Moreover, following a rentier state model creates an indirect reliance upon hydrocarbon sources for healthcare expenditure. As technological advances shift the world’s reliance upon crude oil to renewable energy, oil prices can be expected to plummet, leading to decreased public expenditure on healthcare infrastructure. This shift could potentially leave over 54 million Middle Eastern citizens without access to paramedical professionals, pharmaceutical industries, hospital and clinic facilities, and basic healthcare needs.


Additionally, increasing the reliance on the private sector to fund the healthcare system in GCC countries would allow for an increase in the effectiveness of these healthcare systems. In predominantly public-funded healthcare systems, innovation in healthcare advances is simply absent. As seen with the United States, if GCC countries can promote innovation through a private-funded healthcare system, both innovation and effectiveness of the healthcare industry will once again be stimulated in the Middle East.


However, on the other hand, Tawfiq Khoja, the Director-General of the Executive Board of Health Ministers’ Council for Gulf Cooperation Council States, notes the healthcare benefits that oil revenue has brought to GCC states in the past. Khoja specifically highlights that “significant investments in health care infrastructure by GCC governments were observed in the past 25 years in the form of large medical cities and complexes. This increase in hospitals and clinics raised the quality of healthcare services in the region” (Khoja, 2017). Building on the major public investments, Khoja confirms the short-term benefits of the GCC’s public healthcare expenditure. Although the imbalance of healthcare expenditure is present, the GCC’s investments created crucial short-term advances in their provisions for citizens.

With these sides in mind, we must examine the future of healthcare expenditure in GCC states.

Looking towards the future, the Saudi Arabian government revealed their plan to advance within their expenditure issue. Launching Saudi Vision 2030, the Saudi government created an initiative to advance their healthcare industry. Through their usage of Public-Private Partnerships (PPPs), Saudi Arabia has initiated the process of moving away from a healthcare industry that is heavily reliant upon state funding. By putting the financial burden on private companies, Saudi Arabia can then spend more money on other government-related duties, such as infrastructure, educational opportunities, and investing in green energy as the world transitions towards a post-oil economy.


All in all, the remaining countries within the GCC, as well as the MENA region, should follow Saudi Arabia’s initiative. Healthcare infrastructure is vital for the proper functioning of a country, and without consistent funding, hospitals and clinics are at risk of closing. With the utilization of PPPs and the gradual shift of the healthcare infrastructure expenditure to private companies, stability can be ensured within an essential industry in the Middle East.

 

References


Fullman, N., Yearwood, J., Abay, S., Abbafati, C., Abd-Allah, F., & Abdela, J. et al. (2018). Measuring performance on the Healthcare Access and Quality Index for 195 countries and territories and selected subnational locations: a systematic analysis from the Global Burden of Disease Study 2016. The Lancet, 391(10136), 2236-2271. doi: 10.1016/s0140-6736(18)30994-2

Halaoui, Hilal, et al. “Private-Sector Participation in the GCC: Building Foundations for Success.” Strategy&, Ideation Center Insight, 30 Jan. 2005, https://www.strategyand.pwc.com/m1/en/ideation-center/media/private-sector-participation-in-the-gcc.pdf

Khoja, Tawfiq et al. “Health Care in Gulf Cooperation Council Countries: A Review of Challenges and Opportunities.” Cureus vol. 9,8 e1586. 21 Aug. 2017, doi:10.7759/cureus.1586.

Weaver MR, Nandakumar V, Joffe J, et al. Variation in Health Care Access and Quality Among US States and High-Income Countries With Universal Health Insurance Coverage. JAMA Netw Open. 2021;4(6):e2114730. doi:10.1001/jamanetworkopen.2021.14730

"What Is Rentier State | IGI Global". Igi-Global.Com, 2021, https://www.igi-global.com/dictionary/rentier-state/44104.

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