Lebanon has run out of many essential medicines and will be short of hundreds more by the end of July, a medical trade body said on Sunday.
Drugs for breast cancer, multiple sclerosis, diabetes and other life-threatening illnesses are either out of stock or running low, the Medical Equipment & Devices Importers Syndicate said. It was its second warning in two weeks about the impact of the country’s economic crisis on the medical sector.
“Hundreds of essential medicines for chronic and incurable diseases are out of stock, and hundreds more will be unavailable by the end of July if we do not start importing again as soon as possible,” a statement from the syndicate said.
The warning is the latest sign that Lebanon’s healthcare sector, once among the best in the Middle East, is now crumbling owing to a severe economic crisis.
Lebanon imports 80 per cent of its drugs, but central bank’s declining foreign currency reserves, which are needed to pay for imports, have caused payment delays and shortages. Medical importers have stopped purchasing drugs for more than a month because the bank failed to reimburse suppliers.
The central bank owes foreign pharmaceutical companies upwards of $600 million for drugs purchased since last December, the syndicate’s chief, Karim Gebara, told The National. As a result, importers cannot obtain new lines of credit.
Mr Gebara said the country was running out of medicine for chronic and serious diseases.
“Hormone therapy for breast cancer is already out of stock,” he said.
“Medicines for multiple sclerosis, diabetes, and blood pressure are either in short supply or out of stock.”
The Lebanese pound has lost more than 90 per cent of its value since 2019. Rampant inflation has slashed the value of salaries and pushed more than half of the population into poverty, according to UN data.
Medicines have remained affordable for many because of the government’s subsidy on imports of essential items. But the lower cost has also encouraged smuggling and hoarding, which has made the shortages worse.
We have a major crisis. People are unable to find the drugs they need anywhere
Karim Gebara,
head of Medical Importers Syndicate
Shortages of medicines have become common in the past year, but the situation now is critical, Mr Gebara said.
“We have a major crisis. People are unable to find the drugs they need anywhere,” he said, and urged authorities to find a long-lasting solution.
Lebanon’s healthcare sector has faced mounting difficulties in the past months.
Doctors have said that long power cuts, often lasting more than 20 hours a day, are affecting their work in hospitals.
A brain drain of skilled medical staff looking to emigrate to escape worsening living and working conditions is also a threat to the quality of care in the country.
About 1,000 of the 15,000 doctors registered with the Order of Physicians have left Lebanon since 2019.
The crisis comes as hospitals are under strain from dealing with the coronavirus pandemic. The detection of the first cases of the highly infectious Delta variant of Covid-19 last week has raised fears of a new surge in cases.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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