In his Second
Opinion column, Dr Constantine Constantinides from healthCare cybernetics looks
at the growing interest in Healthcare Free Zones, how they may aid the
development of medical tourism and what is needed to take them forward.
to Der Spiegel, the German government is working on a
six-point plan, aimed at supporting economic development in EU countries facing
economic difficulties, which foresees the creation of Free Trade Zones.
Trade Zone refers to a designated area in which companies are taxed very
lightly or not at all in order to encourage economic activity.
(2012), 31 countries have one or more free trade zones. Currently (2012) only
Dubai has a Free Trade Zone dedicated to healthcare.
after 2012, I expect to see other countries announce the establishment of
Healthcare Free Zones. And at least one
country feels that if one Free Zone is good, four or more is probably better!
Turkey has four
cities wanting to become Health Tourism Free Zones, as part of Turkey’s
newly-announced Free Zone policy and strategy.
Free Zones replace…medical
tourism cities, hubs and clusters
scores of “medical tourism cities, in name only” and self-proclaimed “medical
tourism hubs” and “medical tourism clusters”.
They are “old hat”. The future points towards the establishment of Health
Tourism Free Zones.
associated with any Free Zone are to:
and observation indicate that Free Zones:
employment at all educational levels
value added community benefits
infrastructure development and utilization
The advantages of Healthcare
obvious competitive advantage of Health Tourism Free Zones, as Health
Tourism Destinations, is related to cost and thus pricing levels. Less or no
taxation means that services can be offered at lower prices.
Let us not
forget that Free Trade Zones are also actual or virtual Free Ports. This means
that importing equipment to set up facilities is not subject to import duties.
This makes it more cost-effective (and attractive) for providers of services to
set up a business.
benefit of such Zones is their ability to stimulate development in
complementary industries, as well, including:
Creating a Healthcare Free
does it cost to create a Healthcare Free Zone?
starting a Free Trade Zone does not necessarily require millions of dollars. There
are examples of Free Trade Zone projects that did not require funding support. Free
Trade Zone projects seem to be more effort intensive rather than capital
intensive. Nevertheless, the issues of financing and investment usually arise.
The issue of investment
thing that promoters of Free Zone Development will start looking for are
financial investors (an elusive species…) Surprisingly, though, we read stories
in which Fund Managers actually pursue project promoters with offers to invest.
They view Free Trade Zones supported by the State or Government as secure
cases, wise and enlightened governments introduce the idea of creating economic
free zones. In most instances, however, for those coming up with the idea, it is
a matter of having to lobby the government.
case, the principal challenge and difficulty is to convince Government that the
country has “nothing to lose” and potentially “much to gain”. The exercise
involves going from Minister to Minister explaining the net benefits to the
National Economy. We know that getting any Minister to agree to anything is
difficult and time-consuming. And, as
one would expect, getting all the relevant Ministers, and the Government, to approve, and vote into law, such an
initiative, proves very difficult indeed.
regarding the establishment of Free Trade Zones, indicates that the initiative
needs to be led from the very top (decision-making level). Guidance and input
from outside “experts” is essential, but will only produce limited results
without the blessing and active support of key Ministers and Ministries.
Access to logistics
logistics comes from the Greek word logistiki meaning financial organization, and
primarily refers to the management of the movement or flow of goods, services
and persons. Experts on the subject point out that Free Zones rely on “logistics”,
and that it is pointless and a waste of time and effort to even consider
establishing a Free Trade Zone if the logistics are wrong.
in this instance take the form of access /accessibility:
“access” needs include:
power and ideally, access to an alternative power source.
of high speed telecommunications.
to a pool of available labour.
to a sophisticated and transparent banking system (without over-regulation from
the Central Bank)
The need to tap into
complementary fields of expertise
comes to implementing plans for Free Trade Zones, having the knowledge is a
“good thing” but what is really needed, is the ability (and proof of prior
experience) to implement the business model. There is a need for expertise (or
access to expertise) in such fields as banking and finance, administration,
ICT, human resources development, engineering and planning (and quite a few
But even Free
Zone Experts will need to tap into sector-specific expertise when it comes to sector-specific
Free Zones such as Healthcare Free Zones.
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