saudi arabia healthcare market report chapter one - part 5 of 5

Gulf Writers & Dreamdrive Digital

G u l f W r i t e r s & D r e a m d r i v e D i g i t a l

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Most problematic factors for doing business

Restrictive labour regulations are the main hindrance to investors who would want to do or find business in KSA. Other countries in the GCC also experience such restrictive labour regulations,

unrestricted labour sector, and lack of application of minimum wage policies leading to influx of unskilled expatriates. Other qualified expatriates tend to work far below their statutory wage requirements. The second challenge is the inadequacy of educated workforce, followed by inefficient government bureaucracy, lack of access to financing, poor work ethics in national labour force, and high tax rates. Other minor problems include the insufficient capacity to innovate, corruption, tax regulations, inadequate supply of infrastructure and inflation. Aside these problems, the government is quite consistent and stable in policy application. Crime and

theft is on the minimum; also general public health remain in good condition.

5.0 Healthcare Expenditure

Comparison of KSA GDP contribution to healthcare, healthcare expenditure per capita, and other healthcare financing exponential with other countries help comprehend figures in much better. A look at the relationship between population and healthcare exponentials of countries in the GCC

region show that KSA holds about 60% of the total population and healthcare financing respectively. Based on population and GDP projections for 2014 and percentage of GDP contribution to health expenditure for 2011, Figure 17 outlines GCC countries and their

respective percentage of GCC population and GCC healthcare expenditure. KSA holds 60% of GCC population and about 63% of total GCC healthcare expenditure. At the close of at the third quarter of 2012, KSA controlled close to 75% of healthcare in the GCC that year with a budget of US$ 13.5 billion which excluded another amount of US$ 4.3 billion for the large healthcare cities projects initiated across the country. An amount of US$18 billion was invested into healthcare by the government for 2012 alone; adding private healthcare and other healthcare

Figure 16. Most Problematic areas for doing business in KSA (2014)

Source: World Economic Forum (2013)



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financing totals a healthcare budget of 21.3 billion for the 2012/2013 period. With a GDP of US$

984 billion and still galloping, more investment is expected in the health sector.

Figure 17. GCC Population and Healthcare Expenditure as percentage of GCC (2014)

Source: Gulf Writers

Figure 18. Percentage of GDP spent on healthcare (2011)




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A much broader comparison of healthcare as a percentage of GDP is illustrated in Figure 18.

KSA percentage of GDP contribution to healthcare falls behind several countries like Australia, Japan, UK, Germany, France and the United States. Government healthcare expenditure as a percentage of total healthcare expenditure was at 68.93% and formed 6.84% of total

government spending. More recent individual government spending is outlined further below.

Figure 19. Expenditure Ratios (2011)


Figure 20. Comparative per capita Expenditure on Healthcare (2011 – US$)


% of total health expenditure % of government expenditure

Australia 68.51 16.76

Bahrain 71.03 9.16

Canada 70.41 18.34

Germany 75.85 18.52

Kuwait 82.17 5.91

Qatar 78.61 5.81

Saudi Arabia 68.93 6.84

UK 82.70 15.87

United States 45.94 19.80

UAE 74.39 8.81

Japan 80.01 18.18

Government Healthcare Expenditure



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Healthcare per capita comparisons among these countries are further illustrated in Figure 20.

Healthcare expenditure per capita for KSA stood at $757.72 in 2011 compared to that of the United States at $8,607.88. The government of Saudi Arabia contributes 68% of healthcare expenditure as that of the United States contributes 46% of healthcare expenditure. Healthcare

expenditure as a percentage of GDP hovers between 3-4.5% as shown in Figure 21.

Figure 21. KSA Healthcare Expenditure as a percentage of GDP
