ASEAN: Regional Trends in Economic Integration, Export ... - USITC

facilitate movement of professionals throughout the region. 66 MRAs for nursing,
medical, and dental professionals are being implemented, and coordinating committees
are working to develop a framework for core competencies and standards, relevant laws
and regulations, entry procedures, and other related issues for each profession. 67 The
MRAs are expected to increase the competitiveness of ASEAN healthcare service
providers by expanding the pool of skilled labor. 68
Inbound Investment
Both international and intra-ASEAN investment in healthcare in ASEAN have reportedly
increased in recent years, although limited data exist on regional investment flows. 69
Anecdotal evidence suggests that intra-ASEAN investment has grown as regional
healthcare groups have established operations throughout the region; at the same time,
most extra-ASEAN investment has entailed private equity investors taking stakes in
ASEAN private healthcare groups and facilities. 70 Leading ASEAN regional healthcare
groups, largely from Malaysia, Singapore, and Thailand, have expanded into their
developing-country neighbors, such as Cambodia, Indonesia, and Vietnam, often by
acquiring minority shares in existing facilities. 71 For example, KPJ Healthcare (Malaysia)
and ParkwayHealth (Singapore) have both invested in Indonesia, and Thailand’s
Bangkok Hospital has established regional affiliates in Cambodia, Burma, and Vietnam. 72
At the same time, many of these leading ASEAN healthcare providers have attracted
investment from outside of ASEAN. For example, in 2005, Newbridge Capital (United
States) acquired a minority share of Singapore’s Parkway Holdings, the parent company
of the Parkway Hospital groups, for S$311 million (US$131 million). 73 Similarly, in
2008, U.S.-based Lombard Investments acquired a minority stake in the Philippine’s
Professional Services Inc., the owner of a private hospital. 74
As mentioned earlier, growth in intra-regional investment has been driven by expansion
strategies adopted by local healthcare providers, intended to maintain relationships with
their patient populations and continue revenue growth. 75 In recent years, traditional
medical travel destinations such as Singapore and Thailand have seen increased
66 ASEAN Secretariat, “Appendix 1,” n.d.
67 ASEAN Secretariat official, e-mail to USITC staff, April 25, 2010.
68 Industry representative, interview by USITC staff, Kuala Lumpur, March 11, 2010.
69 Industry representatives, interviews by USITC staff, Singapore, March 7 and 8, 2010. ASEAN
countries that do report statistics on foreign investment, such as Singapore, often do not report data specific
to healthcare services, but instead aggregate investment in health care services with other industries. For
example, Singapore reports healthcare services in the “other” category, which also includes agriculture and
related services; fishing, operation of fishing hatcheries, and fish farms; extraction of crude petroleum and
natural gas; other mining and quarrying; electricity and gas supply; collection, purification, and distribution
of water; sewage and refuse disposal, sanitation; recycling; education; social and community activities; arts,
entertainment, and recreation; repair and maintenance of vehicles, office equipment, and personal and
household goods; other services activities; public administration and defense; and domestic work activities.
As a result, the investment discussion below is based on data for specific transactions, and anecdotal
information. Singapore Department of Statistics, “Singapore’s Investment Abroad,” April 2010, 32.
70 Foreign Direct Investment (FDI) is only relevant to private healthcare markets. Smith, “Foreign Direct
Investment and Trade in Health Services,” 2004, 2318.
71 World Health Organization (WHO), Regional Office for the Western Pacific, “Cambodia,” 2009;
industry representative, interview with USITC staff, Singapore, March 9, 2010.
72 Bangkok Hospital Web site, “Overseas Network Affiliates.”
73 Bureau van Dijk, Zephyr database, April 27, 2010.
74 Ibid.
75 Industry representative, interview by USITC staff, Singapore, March 9, 2010.
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