authorization for foreign doctors to practice) but can treat local patients only within a certain legal limit (20 percent of the clientele). As a result, there are more leakages, and spillover effects for the local population are minimal. On the contrary, in Indonesia, foreign investment is directed to private wings in teaching and tertiary care hospitals in cities other than Jakarta. There, positive spillover effects are maximized. Similarly, in the case of Thailand (case study n°6), the government has introduced compulsory public service and requires from the private sector a contribution to investment in education (to both avoid and compensate for the effects of internal brain drain).<sup>4</sup>

# <u>Mode 4</u>

Imports under mode 4, if not properly managed, could raise a number of issues. First, mode 4 movements of personnel are often mistaken with permanent migration. Then, the media has related a number of stories where nurses, and sometimes doctors, from developing countries had been exploited while working on assignments abroad. Foreign temporary employees could be perceived as a threat by national employees if different labor conditions (including salary) apply. This is unfortunately a frequent scenario, and while not a disincentive for mode 4 trade, importing countries should make special effort to avoid such abuses, and better regulate the temporary movement of health personnel.

# **1.2. The export side: Trade in health services as an engine of growth and diversification**

Exports are the focal point of attention of a large segment of the literature on trade. Gains promised to participants to the global race for medical tourism have generated a few vocations. Long neglected, trade in health services appears as a credible engine of export growth and diversification in selected developing countries. While the benefits could be important, it should be noted that not all countries have a comparative advantage in the sector, and some forms of export could have negative effects domestically unless adequate accompanying measures are taken.

#  **Global trade and prospects at a glance**

Statistics on trade in services – at large – are scarce and imprecise, in part because services are non-tangible and hence long considered as non-tradable. Health is no exception, and it remains difficult to assess the real size of the global health services trade market. Estimates vary significantly: for example, a 2004 McKinsey study reported that 150,000 foreigners visited India for treatment that year, while a most recent 2008 study by the same consulting firm suggested that “the market is not as large as reported” and placed the current market at 60,000 to 85,000 medical tourists a year (Ehrbeck et al., 2008). Another consulting firm, Deloitte (2008), estimated the world medical tourism market to be around USD 60 billion in 2008 (estimated to grow to USD 100 billion by 2010) and one million+ medical tourists annually, with 750,000 for the US alone (estimated to grow to 6 million by 2010).

Despite these variations, it is widely recognized that trade in the health sector has a strong growth potential. It is also recognized that developing countries will potentially be the main benefactors of these new trade opportunities. Factors of growth include: ageing of the population and growing demand in the North (shortages of health care providers), rising income (and hence demand) and

> 4 These measures could also have negative effects, such as increasing absenteeism in the public sector, and should be designed with great care.

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