For decades, Rwanda has battled significant levels of hepatitis B (HBV) and C (HCV) infections. Sidonie Uwimpuhwe, Rwanda’s Country Director at the Clinton Health Access Initiative (CHAI) reports that an estimated 4% of the population were with living with HCV, whilst HBV prevalence was around 2% when the programme started. The burden is more pronounced in those over the age of 55, where HCV prevalence rises to 16%.1 The scale of infection is also slightly higher in vulnerable populations, such as those living with other conditions like HIV.
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Putting money on the table: Nigeria’s policy response to hepatitis B and C
Nigeria has seen a steady increase in the prevalence of viral hepatitis over the past few decades. The introduction of a routine immunisation programme in 2004 for hepatitis B contributed to a drop in the overall rate of hepatitis infection in children; the number of cases in adults continues to rise.1
The Nigeria HIV/AIDS Indicator and Impact Survey (NAIIS) in 2018 estimates that the overall prevalence of hepatitis B (HBV) is 8.1% and 1.1% for hepatitis C (HCV). This means that an estimated 19 million Nigerians are living with HBV or HCV.2
Hepatitis B and C are particularly deadly forms of the virus, as they can cause chronic illnesses leading to liver cirrhosis and cancer. Since HIV, HBV and HCV are all transmitted through blood and other body fluids, people are often “co-infected” with more than one of these infections. Co-infection rates remain a cause for concern, with the NAIIS survey revealing rates of 9.6% and 1.1% for HIV/HBV and HIV/ HCV co-infections respectively in people living with HIV.3
However, Dr Ruth Bello, Consultant Hepatologist in Nasarawa State highlights that the burden in rural and marginalised Nigerian communities has been found to be higher than the national average. She says that over the last three years in Nasarawa State, the prevalence of HBV and HCV was reported to be 10% and 13.2% respectively, Figure 1 summarises the key factors contributing to the transmission of viral hepatitis in Nigeria, across community, healthcare system and government factors.
Low levels of health awareness and poor-health seeking behaviours are key drivers
Both HBV and HCV infections are preventable through the avoidance of risk factors. For HBV, although there is currently no cure, a vaccine is available. Mother-to-child (or vertical) transmission is one of the main routes of infection, accounting for 90-95% of chronic childhood HBV infection that persists into adulthood.4 Despite free HBV vaccination being available via the routine childhood immunisation programme in Nigeria, the uptake remains poor, with vaccine coverage estimated to be around 51%.2 Dr David Uzochukwu, a general practitioner specialising in hepatitis diagnosis and treatment, attributes this partly to poor health knowledge with individuals against vaccination as a practice. Dr Danjuma Adda, Founder of Chagro Care Trust and patient advocate agrees, explaining that the poor uptake rate is especially noticeable in more rural and socio-economically deprived areas, where culture and religion have a strong influence, and individuals often seek medical advice from alternative medical practitioners and herbalists.
Apart from vaccination, screening is vital to find how many people in the country are living with either an HBV or HCV infection, and to link them to the right care. On World Hepatitis Day 2020, the World Hepatitis Alliance chose the theme “find the missing millions” to highlight those people who remain undiagnosed and therefore untreated. The nature of the infections means that HBV and HCV are usually asymptomatic and can go unnoticed until individuals’ livers are significantly damaged. Often described as Nigeria’s silent killer, figures show that more than half the population is likely to have never been tested.8 Poor health-seeking behaviours are a major challenge that makes screening for viral hepatitis difficult in Nigeria. Similarly, most Nigerians do not attend annual medical checks where there is the opportunity for infections to be detected early. In parts of northern Nigeria where there are areas dealing with conflict, this further impacts the success of advocacy, screening and immunisation programmes.5 Organisations such as the Society of Family Health (SFH) in Nigeria recognise the importance of bringing health closer to individuals and their homes to improve access to, and uptake of, essential health information and services. For example, SFH supports the Nigerian government with service delivery by utilising primary health care facilities and social franchising networks comprising private and faith-based hospitals.6
“Decentralisation of care and taskshifting to non-specialists is one way in which the management of hepatitis could be rapidly improved in Nigeria.” Dr Ruth Bello
Furthermore, gaps in knowledge around infection prevention and control, and safe needle exchange among health professionals needs to be addressed across the country. At present, the majority of hepatitis expertise is concentrated within highly specialised health facilities (tertiary care).2 Dr Uzochukwu concurs, outlining that in 2016, there were approximately 108 hepatitis specialists in Nigeria, all of whom were practicing in the major cities. This shortage of experts and the resulting geographic barrier to access is problematic, as many general practitioners working in primary care are not well trained in how to diagnose HBV or HCV, which laboratory tests are required and which treatments to administer. There is also lack of awareness on modes of transmission among health workers, with a study finding that only 44% of health workers were aware that HBV could pass between mother and child.7 All healthcare workers should receive ongoing training and education on the routes of hepatitis transmission and diagnosis and treatment options.8
Awareness about the disease is also low because the Nigerian government has not placed enough focus on partnering with non-governmental organisations and donor agencies that concentrate solely on advocating for hepatitis elimination. Traditionally, the focus has been on treating diseases such as HIV and TB, which has left the hepatitis programme in the country underfunded.9 With undiagnosed hepatitis being such a critical problem in Nigeria, it is imperative that more initiatives and campaigns to raise awareness on viral hepatitis are launched.
Addressing funding issues surrounding hepatitis screening, diagnosis and treatment
Besides improving levels of knowledge on viral hepatitis in Nigeria, the gaps in funding for screening, diagnosis and treatment are probably the most critical issues to address.
Dr Uzochukwu says that with the help of civil society organisations, donors and advocates, free screening camps for HBV and HCV have been made available in some parts of the country. However, these are not geographically accessible by everyone who needs them, and the Nigerian Government is yet to fund the camps on a large-scale basis. Moreover, even though some free hepatitis screening programmes are available for pregnant women, there is no funding available to provide vaccinations and prevent infection in those mothers who test negative. In the same way, there are no affordable HBV vaccination schemes in place for at-risk populations including healthcare workers, people who inject drugs and men who have sex with men.2 Nevertheless, the national hepatitis clinical guidelines recommend that at-risk populations such as healthcare professionals and key workers be screened for hepatitis infection.4
Despite a significant push to implement universal health coverage in Nigeria, approximately 95% of the population is still not covered by the National Health Insurance Scheme.2, 8 In addition to this, the 2016 National Guidelines for the Prevention, Care and Treatment of Viral Hepatitis focus on the inclusion of viral hepatitis as part of the universal health coverage, however, this is yet to happen.4 Since the cost of vaccines, testing and treatment must be paid for privately, this significantly hampers uptake. Dr Danjuma Adda comments that with 55% of Nigerians living on less than 1 USD a day, hepatitis screening, diagnosis and treatment is beyond the reach of most citizens. He estimates that of the 19 million individuals predicted to be living with viral hepatitis, less than 5% can afford to be tested. This is not too surprising, given that a viral load test for hepatitis costs 20,000 Naira (53 USD) and the 12-week treatment course for curing a chronic HCV infection costs between approximately 200 to 300 USD.9 Moreover, Dr. Adda says that a significant amount of the rapid test kits being used in primary and secondary care are not prequalified by the World Health Organization, making them unreliable. The better-quality testing equipment such as enzyme-linked immunosorbent assay (ELISA) and molecular platforms for viral load, are generally only available in tertiary care settings. To add to the problem, these are often in limited supply. According to Dr Adda and Dr Uzochukwu, the substantial accessibility issues force individuals to turn to herbalists for alternative treatments, which often worsens their condition.
Over the years, the Nigerian government along with Society for Gastroenterology and Hepatology has been partnering with donor organisations to come up with ways to make hepatitis care more affordable and accessible in the country, but more financing is required.8
Nasarawa State takes matters into its own hands
As a whole, the country has been slow to fully implement its strategies, which has spurred responses at the State level to scale testing and treatment. Nasarawa is leading in these efforts and serves as a valuable case study. In 2015, the State government launched their initial viral hepatitis elimination program and in February 2020, announced its 5-year HCV elimination plan. The plan aims to screen over 2.4 million individuals and treat 124,000 by 2024, six years ahead of the WHO’s 2030 target.10
Dr Ruth Bello, who is a member of the Viral Hepatitis Technical Working Group in Nasarawa, says that the State government has improved hepatitis services by shifting tasks where possible. Task-shifting and strengthening of hospital and specialist health services across the state has stimulated increased awareness and demand for viral hepatitis services. Despite the effect of the covid-19 pandemic on the resilience of the Nigerian health system, the Nasarawa State government has proceeded to build the capacity of healthcare workers across 21 health facilities to improve hepatitis care. Through the commitment of a seed fund of 40 million Naira (110, 000 USD), Nasarawa has screened over 85,000 people and cured 1,300 of those who were found to be infected.9
Looking forward to 2030 and the need for more commitment
With 2030 coming up fast and considering the impact of the covid-19 pandemic on health systems around the globe, Nigeria will need to quickly gain momentum on its efforts towards elimination of viral hepatitis if it is to going to reach the WHO target. The country has what it takes to achieve this goal in terms of the plans, strategies and guidelines that it already has in place. However, further political and financial commitment by the Nigerian government is needed to implement these policies.
Looking ahead, the Ministry of Health should prioritise partnerships with donor organisations to fund the expansion of the National Health Insurance Scheme to cover all aspects of hepatitis care. National-level price negotiations for viral hepatitis testing and treatments could further support this expansion of access. Hepatitis awareness campaigns for the general public and healthcare professionals are also important to increase health literacy and improve health-seeking behaviour. Additionally, healthcare professionals require training to raise awareness of and knowledge about viral hepatitis. Central government could also seek to learn from best practice examples within the country to improve services.
While every effort has been taken to verify the accuracy of this information, The Economist Intelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report. The findings and views expressed in the report do not necessarily reflect the views of the sponsor.
[1] Nwokediuko S. Chronic Hepatitis B: Management Challenges in Resource-Poor Countries. Hepatitis Monthly [Internet]. 2011;11(10):786-793. Available from: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3234575/
[2] The Journey to Hepatitis Elimination in Nigeria - Hepatitis B Foundation [Internet]. Hepatitis B Foundation. 2020 Available from: https://www.hepb.org/blog/journey-hepatitis-elimination-nigeria/
[3] World Hepatitis Day: Nigerians implored to be screened and vaccinated - Nigeria [Internet]. WHO. 2019 Available from: https://www.afro.who.int/news/world-hepatitis-day-nigerians-implored-be-screened-and-vaccinated?country=979&name=Nigeria
[4] Why Nigeria must find everyone who has hepatitis and doesn’t know it [Internet]. The Conversation. 2020. Available from: https://theconversation.com/why-nigeria-must-find-everyone-who-has-hepatitis-and-doesnt-know-it-143208
[5] Dying Unaware: Race to rescue “the missing millions” from hepatitis in Nigeria [Internet]. Nigeria Health Watch. 2019. Available from: https:// nigeriahealthwatch.medium.com/dying-unaware-race-to-rescue-the-missing-millions-from-hepatitis-in-nigeria-98b80b07b1be
[6] Health and Social Systems Strengthening. Society for Family Health, Nigeria. 2020. Available from: https://www.sfhnigeria.org/health-and-socialsystems-strengthening/
[7] Kolawole, Akande & Akere, Adegboyega & Osundina, Morenike. (2018). Knowledge of hepatitis B virus and vaccination uptake among hospital workers in south west, Nigeria.
[8] Enabulele O. Achieving Universal Health Coverage in Nigeria: Moving Beyond Annual Celebrations to Concrete Address of the Challenges. World Medical & Health Policy. 2020;12(1):47-59.
[9] Folorunsho-Francis A. At N20,000, hepatitis test is beyond most Nigerians -Investigation - Healthwise [Internet]. Healthwise. 2020. Available from: https://healthwise.punchng.com/at-n20000-hepatitis-test-is-beyond-most-nigerians-investigation/
[10] Nasarawa Budgets N40m To Combat Hepatitis. Hepatitis Voices. 2020 Available from: https://hepvoices.org/2020/02/nasarawa-budgets-n40m-tocombat-hepatitis/
Value-based healthcare in Sweden: Reaching the next level
The need to get better value from healthcare investment has never been more important as ageing populations and increasing numbers of people with multiple chronic conditions force governments to make limited financial resources go further.
These pressures, along with a greater focus on patient-centred care, have raised the profile of VBHC, especially in European healthcare systems. Sweden, with its highly comprehensive and egalitarian healthcare system, has been a leader in implementing VBHC from the beginning, a fact that was underscored in a 2016 global assessment of VBHC published by The Economist Intelligence Unit.
This paper looks at the ways in which Sweden has implemented VBHC, the areas in which it has faced obstacles and the lessons that it can teach other countries and health systems looking to improve the value of their own healthcare investments.
Breast cancer patients and survivors in the Asia-Pacific workforce
With more older women also working, how will the rising trend of breast cancer survivorship manifest in workplace policies, practices and culture? What challenges do breast cancer survivors face when trying to reintegrate into the workforce, or to continue working during treatment? How can governments, companies and society at large play a constructive role?
This series of reports looks at the situation for breast cancer survivors in Australia, New Zealand and South Korea. It finds that while progress has been made, more needs to be done, particularly in South Korea, where public stigma around cancer remains high.
Covid-19 has rightly seized the attention of health system officials. Nevertheless, the disease has done nothing to change the underlying consideration which led the WHO – and, just as recently, also the Asia-Pacific Economic Cooperation (APEC) and the G201 – to raise the policy profile of healthy ageing’s importance to economic growth and human well-being. More and more of us are living longer and longer. This is good news, but also presents challenges.
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Demystifying ageing: Lifting the burden of fragility fractures and osteopor...
Fragility fractures are already a significant public health challenge across Asia-Pacific. Their lasting impact on societies and economies is well-documented, leading to loss of mobility, independence and, in some instances, death for their elderly sufferers. In many traditional Asia-Pacific societies, where older people often serve as caregivers for younger generations, fractures can devastate entire families and communities. From a broader perspective, the cost of treating hip fractures to Asia-Pacific societies equates to 19% of GDP per capita, underscoring the enormity of the problem.
As populations age, many believe fragility fractures will become more widespread, yet this is not necessarily the case. Osteoporosis, a condition that makes bones more likely to break and a leading cause of fractures, was within living memory thought to be a natural part of ageing. This myth is gradually being dispelled. The condition is preventable and treatable—a fact which receives too little attention across the region. This study looks at the challenge fragility fractures and osteoporosis pose and how health systems are responding in eight Asia-Pacific economies: Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea, Taiwan and Thailand (called collectively in the text the “scorecard economies”).
Download the report in English | 한국어 | 繁體中文
View the infographic in English | 한국어 | 繁體中文
Fight the Fracture, a public education campaign, aims to empower patients who have suffered a fragility fracture and their caregivers to proactively seek medical professional help in secondary care prevention ‒ the prevention of a subsequent fracture ‒ by providing them with educational information, tools and resources. Find out more about Fight the Fracture at: www.fightthefracture.asia
Ageing with strength: Addressing fragility fractures in Asia-Pacific
By 2050 Asia-Pacific will be home to 1.3bn people older than 60. This growth will happen at a time when lifespans are also becoming longer. As a result, the region is expected to see an increase in diseases associated with age. Among them is osteoporosis, a condition that makes bones less dense and more fragile and can cause fragility, or low-impact, fractures—those that occur (often to the hip, spine or wrist) when someone falls from a standing height or lower.
Osteoporosis is defined as having a bone mass density (BMD) 2.5 standard deviations below the average value of a young healthy woman. It is a disease that affects far more women than men, but the latter still account for about a fifth to a quarter of hip fragility fractures worldwide.
What are the key challenges for osteoporosis patients in the APAC region and how are these affecting their daily lives? Download our report for more insights.
This Index of ten European countries shows, positively, a broad engagement with the fundamental digital health policies necessary to support digital diabetes care, including the presence of underlying eGovernment and eHealth plans, the utilisation of electronic health records, and the presence of national diabetes policy. However, to enable digital diabetes care at scale, changes may be needed to key enablers of access to digital diabetes tools: reimbursement pathways; guidance and diabetes plans; assessment and evaluation processes and training in digital diabetes tools.
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Value-based healthcare in Sweden: Reaching the next level
The need to get better value from healthcare investment has never been more important as ageing populations and increasing numbers of people with multiple chronic conditions force governments to make limited financial resources go further.
These pressures, along with a greater focus on patient-centred care, have raised the profile of VBHC, especially in European healthcare systems. Sweden, with its highly comprehensive and egalitarian healthcare system, has been a leader in implementing VBHC from the beginning, a fact that was underscored in a 2016 global assessment of VBHC published by The Economist Intelligence Unit.
This paper looks at the ways in which Sweden has implemented VBHC, the areas in which it has faced obstacles and the lessons that it can teach other countries and health systems looking to improve the value of their own healthcare investments.
Breast cancer patients and survivors in the Asia-Pacific workforce
With more older women also working, how will the rising trend of breast cancer survivorship manifest in workplace policies, practices and culture? What challenges do breast cancer survivors face when trying to reintegrate into the workforce, or to continue working during treatment? How can governments, companies and society at large play a constructive role?
This series of reports looks at the situation for breast cancer survivors in Australia, New Zealand and South Korea. It finds that while progress has been made, more needs to be done, particularly in South Korea, where public stigma around cancer remains high.
Cardiovascular diseases levy a substantial financial toll on individuals, their households and the public finances. These include the costs of hospital treatment, long-term disease management and recurring incidence of heart attacks and stroke. They also include the costs of functional impairment and knock-on costs as families may lose breadwinners or have to withdraw other family members from the workforce to care for a CVD patient. Governments also lose tax revenue due to early retirement and mortality, and can be forced to reallocate public finances from other budgets to maintain an accessible healthcare system in the face of rising costs.
As such, there is a need for more awareness of the ways in which people should actively work to reduce their CVD risk. There is also a need for more primary and secondary preventative support from health agencies, policymakers and nongovernmental groups.
To inform the decisions and strategies of these stakeholders, The Economist Intelligence Unit and EIU Healthcare, its healthcare subsidiary, have conducted a study of the prevalence and costs of the top four modifiable risk factors that contribute to CVDs across the Asian markets of China, Australia, Hong Kong, Japan, Singapore, South Korea, Taiwan and Thailand.
No time for silence: exploring policy approaches to investment in stroke prevention in France, Germany, Italy, Spain and the UK is an independent report written by The Economist Intelligence Unit, sponsored by The Bristol Myers Squibb–Pfizer Alliance. The report considers policy and investment efforts around best practices for preventing stroke including resources for education, awareness and detection. To better understand variations in European policy, the research has been conducted across five major countries: France, Germany, Italy, Spain and the UK.
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Value-based healthcare in Sweden: Reaching the next level
The need to get better value from healthcare investment has never been more important as ageing populations and increasing numbers of people with multiple chronic conditions force governments to make limited financial resources go further.
These pressures, along with a greater focus on patient-centred care, have raised the profile of VBHC, especially in European healthcare systems. Sweden, with its highly comprehensive and egalitarian healthcare system, has been a leader in implementing VBHC from the beginning, a fact that was underscored in a 2016 global assessment of VBHC published by The Economist Intelligence Unit.
This paper looks at the ways in which Sweden has implemented VBHC, the areas in which it has faced obstacles and the lessons that it can teach other countries and health systems looking to improve the value of their own healthcare investments.
Breast cancer patients and survivors in the Asia-Pacific workforce
With more older women also working, how will the rising trend of breast cancer survivorship manifest in workplace policies, practices and culture? What challenges do breast cancer survivors face when trying to reintegrate into the workforce, or to continue working during treatment? How can governments, companies and society at large play a constructive role?
This series of reports looks at the situation for breast cancer survivors in Australia, New Zealand and South Korea. It finds that while progress has been made, more needs to be done, particularly in South Korea, where public stigma around cancer remains high.
Cardiovascular diseases levy a substantial financial toll on individuals, their households and the public finances. These include the costs of hospital treatment, long-term disease management and recurring incidence of heart attacks and stroke. They also include the costs of functional impairment and knock-on costs as families may lose breadwinners or have to withdraw other family members from the workforce to care for a CVD patient. Governments also lose tax revenue due to early retirement and mortality, and can be forced to reallocate public finances from other budgets to maintain an accessible healthcare system in the face of rising costs.
As such, there is a need for more awareness of the ways in which people should actively work to reduce their CVD risk. There is also a need for more primary and secondary preventative support from health agencies, policymakers and nongovernmental groups.
To inform the decisions and strategies of these stakeholders, The Economist Intelligence Unit and EIU Healthcare, its healthcare subsidiary, have conducted a study of the prevalence and costs of the top four modifiable risk factors that contribute to CVDs across the Asian markets of China, Australia, Hong Kong, Japan, Singapore, South Korea, Taiwan and Thailand.
Halal standards govern lifestyle choices for 1.9bn Muslims around the world. But spending on halal products accounted for just 7% of global consumer spending on pharmaceuticals in 2018, compared with 17% of global spending on food. Moreover, predictions of growth have disappointed. The sector was expected to expand from US$92bn in 2018 to US$132bn in 2022, but that has now been pushed back to 2024.
Islamic fintech: Reaching the next generation of Muslims
Muslims make up about a quarter of the world’s population and are said to be the fastest growing religious cohort.#_ftn1" name="_ftnref1" title="">[1] As such, the potential market for Islamic financial services is enormous. The median age for Muslims globally is just 24 years old, making a majority of them “digital natives” ready for digital Islamic financial solutions.
“You're not going to be able to access that younger generation if you’re not in the palm of their hand,” says Aris Parviz who heads the North American operations for Wahed Invest, a sharia-compliant - or halal - digital investment platform.
Islamic fintech marries sharia compliance with digitally-delivered financial solutions. This makes it easier for Muslims to access savings, investments, insurance and mortgages that are in line with the principles of their faith. Particularly during the coronavirus pandemic, as countries implement social distancing measures, financial companies are relying on digital channels to ensure customers have access to their services.
Key characteristics of sharia-compliant or halal investing
✖ Profiting from debt is prohibited
✖ Interest payments are prohibited
✖ Investing in businesses that profit from alcohol, arms, tobacco and gambling is forbidden
✔ Earnings are generated through profit-sharing
✔ Islamic finance instruments must be backed by real assets
For Wahed Invest’s co-founder, Junaid Wahedna, the need for such services became clear after his encounter with a New York taxi driver. The Muslim driver was looking for ways to invest in accordance with the values of his faith and sought advice from his imam. His imam’s advice was to put his life savings into Apple stocks. The company’s relatively low debt levels, the imam surmised, made it permissible. “Now, Apple is an amazing company today, but it could have been the AOL of the 1990s,” says Mr Parviz. “No one thought AOL was going to go under, and then what happened?”
The conversation drove Mr Wahedna to establish a sharia-compliant robo-advisory investment firm. “The average person doesn't know too much about Islamic finance investing and doesn’t have access to financial advisors,” Mr Parviz explains. “Our aim is to give Muslims across the globe access to financial markets, to help them improve their financial wellbeing.”
Since launching in 2017, Wahed Invest has amassed over 50,000 users and established offices in the US, UK and Malaysia. “The whole Islamic faith is over 1.8bn people,” says Mr Parviz. “It’s an amazing opportunity because a lot of the conventional players don’t pay attention to it.”
Yielders, a UK-based property investment crowdfunding platform, was born of similar frustrations. “Growing up as a Muslim in the UK, there was a real lack of investment opportunities that did not compromise my faith,” says Irfan Khan, its founder. “Most of the available opportunities were either interest-bearing or too high risk.” His platform lets investors buy into buildings already earning a rental income with as little as £100, without interest or leverage.
Delivering Islamic fintech
Businesses offering Islamic investment solutions digitally must deliver on two fronts: compliance and access.
To ensure compliance with sharia law, fintechs have to navigate an intricate set of rules. Interest charges, or riba, are prohibited. So too are investments in “sin stocks” of businesses profiting from alcohol, arms, tobacco and gambling. The rules also prohibit profiting from debt and require investments to be backed by real assets. This has led to the creation of sukuk—sharia-compliant financial certificates, similar to bonds, which give an investor part-ownership of an underlying asset. There are also detailed investment criteria surrounding a company’s leverage and interest income.#_ftn2" name="_ftnref2" title="">[2]
For access, selecting the right technologies is key. Fintechs are deploying a growing array of halal payment platforms, e-wallets, insurtech and remittance services through mobile phone apps. New digital Islamic banks such as the UK’s Niyah and Germany’s Insha are offering interest-free products through similar channels.
Beyond product delivery, technologies used by fintech firms promise to bolster Islamic finance by driving efficiencies and reducing costs. In turn this could cut costs of payment services and transactions, says Mohamed Damak, global head of Islamic finance at ratings agency S&P Global Ratings.
Technologies such as artificial intelligence might also help to improve compliance. Blockchain, if deployed at scale, has the potential to reduce the risk of fraudulent transactions, Mr Damak argues. Emirates Islamic Bank is already using the technology to authenticate paper cheques in the United Arab Emirates.#_ftn3" name="_ftnref3" title="">[3]
Blockchain for sukuk
To address high costs and a lack of transparency within the sukuk market, “blockchain could literally be the missing link,” according to Mr Damak of S&P Global Ratings.
He expects blockchain technologies will open the market to smaller companies by cutting the cost of issuing a sukuk. In 2019 an Indonesian microfinance institution, BMT Bina Ummah, used a platform created by startup company Blossom Finance to raise US$50,000 in what it claimed to be the first blockchain sukuk.
On transparency, he explains: “At present an issuer can substitute one underlying asset with another without informing investors, even though it can completely change the risk profile of the transaction. Blockchain will resolve that by documenting every change.”
In addition, in instances where there are dozens of assets underlying a single certificate, he predicts that the technology will show investors in real time which ones are underperforming.
The Islamic fintech environment
To achieve ambitious expansion plans, young Islamic fintech firms require a supportive business environment. Incubators are springing up in the Middle East#_ftn4" name="_ftnref4" title="">[4] and Malaysia is home to more than 200 fintech startups given its strong public support of the digital economy.#_ftn5" name="_ftnref5" title="">[5]
Harmonising regulation between countries is an important step. When US-headquartered Wahed Invest first entered Malaysia “the whole concept of sharia-compliant robo-advisory was very new,” Mr Parviz recalls. “So, the regulators had to issue us with a new type of licence altogether.”
Investment, however, is only trickling into sharia-compliant fintech. “There are still very few venture capital and private equity firms that are actively looking at investing in this space because it’s new and they’re waiting to see who’s going to develop the market,” says Mr Khan of Yielders.
“Islamic finance is a US$2trn industry, so for fintech to have a meaningful impact on its growth we need lots of investment, and that is not something we’re really seeing,” Mr Damak echoes.#_ftn6" name="_ftnref6" title="">[6] Among the handful of players are US-based private equity group Frost Capital (which invested US$8m in Affinis Labs, a company that builds Islamic business innovation ecosystems) and Wahed Invest’s investors Boston-based Cue Ball Capital and BECO Capital, a Middle Eastern venture capital firm.
Widening the consumer base
In places where Islamic fintech vies with conventional alternatives, startups will have to compete on more than their religious credentials. “Sharia compliance will help them attract a certain percentage of their market,” Mr Damak explains. “But the biggest portion will be people who would have a preference for Islamic products but go for conventional alternatives if they are cheaper [or offer higher returns].”
When it comes to portfolio investment, “[sharia-compliant models] perform quite competitively as compared to the broader market,” argues Wahed Invest’s Mr Parviz.#_ftn7" name="_ftnref7" title="">[7], #_ftn8" name="_ftnref8" title="">[8] This allows Islamic fintechs to “actually attract some folks who are just interested in the ethical aspects of it,” he says.
In the UK, the competitive savings rates offered by brick-and-mortar Islamic banks have attracted a host of non-religious depositors.#_ftn9" name="_ftnref9" title="">[9] Yet in general they lack their competitors’ economies of scale. High prices for products such as mortgages drive many consumers towards conventional alternatives. If advanced technologies can help to reduce costs, Islamic fintechs might win them over.
More importantly, Mr Khan warns that “many of the newer fintechs need to be careful about how they’re pitching themselves—not to make the same mistakes as traditional financial institutions by focusing [only] on that core Islamic market.”
His solution is to pitch to a wider market. Yielders does not actively promote its Islamic credentials. Almost a quarter of its investors are non-Muslims, a share which Mr Khan wants to grow to more than two-thirds. “I didn’t want people to come to us just because we were sharia-based,” he says. “I wanted people to come to the platform firstly because of the returns that we offered.”
Deploying sharia-compliant financial solutions through digital channels could drive the next wave of growth for Islamic finance. Islamic fintech is poised to deliver financial services sought by a young, middle-class Muslim community that has largely been ignored as well as those seeking ethical financial solutions at the speed and cost of modern finance.
#_ftnref1" name="_ftn1" title="">[1] Michael Lipka, “ Muslims and Islam: Key findings in the U.S. and around the world”, Pew Research: Fact Tank, August 9th 2007. https://www.pewresearch.org/fact-tank/2017/08/09/muslims-and-islam-key-f...
#_ftnref2" name="_ftn2" title="">[2] A M A Ayedh, A Shaharuddin, M I H Kamaruddin, “ Shariah Screening Methodology: Does It 'Really' Shariah Compliance?”, IQTISHADIA, 2019. https://www.researchgate.net/publication/337904142_Shariah_Screening_Met...'Really'_Shariah_Compliance
#_ftnref3" name="_ftn3" title="">[3] “Emirates Islamic is first Islamic bank to integrate blockchain technology into cheques”, Emirates Islamic, June 11th 2017. https://www.emiratesislamic.ae/eng/latest-news/2017/june/news11062017/
#_ftnref4" name="_ftn4" title="">[4] “The race to become Islamic banking’s fintech hub”, The Economist, June 1st 2017. https://www.economist.com/finance-and-economics/2017/06/01/the-race-to-b...
#_ftnref5" name="_ftn5" title="">[5] “Malaysia: A Flourishing Fintech Ecosystem”, International Monetary Fund, February 28th 2020. https://www.imf.org/en/News/Articles/2020/02/27/na022820-malaysia-a-flou...
#_ftnref6" name="_ftn6" title="">[6] https://www.spglobal.com/ratings/en/research/articles/190624-islamic-fin...
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When Goldman Sachs gets involved, things all of a sudden seem much more serious. Such is the case with news the US bank has revived plans to issue its first sukuk (the Islamic equivalent of a bond), reflecting what Reuters called “a sign that Islamic finance is going mainstream.”
Probably the more tell-tale sign was in June when the UK issued its first sovereign sukuk, which was 10 times oversubscribed. Either way, it’s illustrative of the fact that Islamic finance is one of the few areas of the financial services industry—perhaps the only one—growing at a double-digit pace. Total assets in the sector are expected to reach US$2trn this year, a pool large enough for prominent sovereign issuers and banks in the West to take notice.
The rising popularity of Islamic finance in the West is unsurprising to Malaysia’s central bank governor, Zeti Akhtar Aziz. In an interview at Sasana Kijang, the central bank’s sparklingly modern meeting hall in Kuala Lumpur, Ms Zeti noted that unlike most forms of traditional credit creation, Islamic finance has to be backed by real assets and this is one of its most unique and attractive aspects, whether a borrower is in the West or not.
Furthermore, she believes Islamic finance can support the trend seen since the financial crisis of growing trade and investment ties between emerging markets around the world.
“Trade patterns are changing, and there is a greater volume of trade happening between developing economies. This needs to be supported by finance, and Islamic finance because it’s linked to economic transactions… will facilitate this kind of economic activity,” Ms Zeti said.
“This is not just for Muslims. It’s a form of financial intermediation.”
Indeed, global banks are keen to get a piece of the pie. To do that, they need size and expertise when it comes to structuring deals that adhere to shariah law. This is no small feat, as Goldman Sachs can attest after the bank encountered criticism that an initial attempt in 2011 to launch sukuk securities did not follow shariah requirements.
Malaysia’s central bank has been supportive of creating a home-grown mega Islamic bank with at least US$1bn in assets to boost the domestic industry’s cross-border transaction capabilities. “You really need size to be able to do international deals,” Ms Zeti said.
CIMB, Malaysia's second-largest lender, in July said it plans to create a mega Islamic bank by merging with RHB Capital and Malaysia Building Society. If the deal takes place—terms won’t be finalised until October—the combined entity will potentially be able to compete with conventional banks on a global stage in the fast-growing international Islamic finance industry.
The prospect of Malaysia contributing a global player in Islamic finance is certainly welcome and would add to the breath-taking pace at which companies, industries and entire markets in Asia have been internationalising in the past several years.
Is Malaysia’s banking industry ready to broker deals for a much larger population of foreign sukuk issuers? “The perceptions of our local investors are that sometimes is not easy to find a good foreign [sukuk] issue in local currency because they might not be familiar with the company,” Mohd Daud Bakar, founder and chairman of Amanie Advisors, a shariah advisory firm, said at a panel discussion organised by The Economist Events. “Big investment houses like to deal with people they know.”
Local banks may have their work cut out for them.
For a complete playback of the panel discussion on local currency debt, click here.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
Value-based healthcare in Sweden: Reaching the next level
The need to get better value from healthcare investment has never been more important as ageing populations and increasing numbers of people with multiple chronic conditions force governments to make limited financial resources go further.
These pressures, along with a greater focus on patient-centred care, have raised the profile of VBHC, especially in European healthcare systems. Sweden, with its highly comprehensive and egalitarian healthcare system, has been a leader in implementing VBHC from the beginning, a fact that was underscored in a 2016 global assessment of VBHC published by The Economist Intelligence Unit.
This paper looks at the ways in which Sweden has implemented VBHC, the areas in which it has faced obstacles and the lessons that it can teach other countries and health systems looking to improve the value of their own healthcare investments.
The covid-19 pandemic has exposed the vulnerabilities and inequities of the global healthcare system, but it could also catalyze overdue transformative change.
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Health
Value-based healthcare in Sweden: Reaching the next level
The need to get better value from healthcare investment has never been more important as ageing populations and increasing numbers of people with multiple chronic conditions force governments to make limited financial resources go further.
These pressures, along with a greater focus on patient-centred care, have raised the profile of VBHC, especially in European healthcare systems. Sweden, with its highly comprehensive and egalitarian healthcare system, has been a leader in implementing VBHC from the beginning, a fact that was underscored in a 2016 global assessment of VBHC published by The Economist Intelligence Unit.
This paper looks at the ways in which Sweden has implemented VBHC, the areas in which it has faced obstacles and the lessons that it can teach other countries and health systems looking to improve the value of their own healthcare investments.
Breast cancer patients and survivors in the Asia-Pacific workforce
With more older women also working, how will the rising trend of breast cancer survivorship manifest in workplace policies, practices and culture? What challenges do breast cancer survivors face when trying to reintegrate into the workforce, or to continue working during treatment? How can governments, companies and society at large play a constructive role?
This series of reports looks at the situation for breast cancer survivors in Australia, New Zealand and South Korea. It finds that while progress has been made, more needs to be done, particularly in South Korea, where public stigma around cancer remains high.
Cardiovascular diseases levy a substantial financial toll on individuals, their households and the public finances. These include the costs of hospital treatment, long-term disease management and recurring incidence of heart attacks and stroke. They also include the costs of functional impairment and knock-on costs as families may lose breadwinners or have to withdraw other family members from the workforce to care for a CVD patient. Governments also lose tax revenue due to early retirement and mortality, and can be forced to reallocate public finances from other budgets to maintain an accessible healthcare system in the face of rising costs.
As such, there is a need for more awareness of the ways in which people should actively work to reduce their CVD risk. There is also a need for more primary and secondary preventative support from health agencies, policymakers and nongovernmental groups.
To inform the decisions and strategies of these stakeholders, The Economist Intelligence Unit and EIU Healthcare, its healthcare subsidiary, have conducted a study of the prevalence and costs of the top four modifiable risk factors that contribute to CVDs across the Asian markets of China, Australia, Hong Kong, Japan, Singapore, South Korea, Taiwan and Thailand.
Supporting an innovative life sciences ecosystem in Japan
Medical innovation in the life sciences requires a holistic policy and market access environment that supports everything from basic science to product research and development (R&D) and, ultimately, commercialization. Though North America and Europe have historically led innovation in life sciences, Japan has been a leading contributor from Asia for decades. However, emerging life science sectors in South Korea, and more recently China, are quickly catching up after investing heavily in infrastructure, human capital, and R&D, as well as enacting national policies to further bolster their life sciences ecosystems.
This analysis by The Economist Intelligence Unit explores the enabling factors creating a supportive environment for innovation in the life sciences sector in Japan, benchmarked against three other countries: the US, South Korea, and China.
Overall, while Japan is still producing life science innovation at a high level, it appears to be stagnating while the US remains ahead, and regional competitors are either catching up to or surpassing Japan.
Our research identified several opportunities for Japan to build on early progress in fostering an innovative life sciences ecosystem and remain competitive on the global stage. Priority areas that should be addressed include:
Maintaining and expanding a strong workforce
Investing in R&D and incentivising business enterprise
Preserving strong intellectual property (IP) protection while enhancing enforcement and transparency
Increasing encouragement of technology transfer and commercialisation
Ensuring health policies are consistent with those promoting new products
Health system sustainability in Japan: Priorities for structural reform
Japan’s healthcare system has kept the country remarkably healthy with relatively minor changes for nearly six decades. The system provides universal care, generous coverage and the most innovative treatments at a cost that is accessible to all.
Yet the very scope of coverage in the Japanese system obscures the extent to which policymakers have put off making necessary but difficult choices. In particular, the lack of regulation of demand for health services, the pressures of an ageing population and the underdeveloped system for evaluating efficiency and effectiveness of medical products and services could paralyse Japan’s healthcare system as the cost of state-of-the-art medical treatments increase. The economic consequences of this would inevitably reverberate beyond the health system itself.
Without changes in the incentives built into the current system, Japan will struggle to take advantage of medical innovation and to maintain its ability to deliver high-quality, accessible care in the future. As our Health system sustainability in Japan scorecard shows, there are signs that significant fixes to the system may be necessary. Although Japan compares well in many respects to the more expensive and fragmented system in the US, it lags significantly behind the UK and France, and slightly behind neighbouring South Korea, in four of the five principal scoring domains.
Japan’s health system compares especially unfavourably with regard to progress in integrated healthcare and research preparedness, but it also has ground to make up in adequate workforce staffing and in the accountability and patient-centredness of the system. At the same time, it scores well in the provision of a long-term care network. We highlight the report’s key findings below.
Key findings:
Japan’s health financing system is becoming increasingly unsustainable.
The country’s existing price review process acts as a brake on structural health system reform.
Different incentives are needed to efficiently use medical workforce and hospital resources.
Japan’s long-term care system can be a model for other countries but needs better integration with primary care.
Japan lags behind developed country peers in the area of research.
Health system sustainability in Japan: Priorities for structural reform
Japan’s healthcare system has kept the country remarkably healthy with relatively minor changes for nearly six decades. The system provides universal care, generous coverage and the most innovative treatments at a cost that is accessible to all.
Yet the very scope of coverage in the Japanese system obscures the extent to which policymakers have put off making necessary but difficult choices. In particular, the lack of regulation of demand for health services, the pressures of an ageing population and the underdeveloped system for evaluating efficiency and effectiveness of medical products and services could paralyse Japan’s healthcare system as the cost of state-of-the-art medical treatments increase. The economic consequences of this would inevitably reverberate beyond the health system itself.
Without changes in the incentives built into the current system, Japan will struggle to take advantage of medical innovation and to maintain its ability to deliver high-quality, accessible care in the future. As our Health system sustainability in Japan scorecard shows, there are signs that significant fixes to the system may be necessary. Although Japan compares well in many respects to the more expensive and fragmented system in the US, it lags significantly behind the UK and France, and slightly behind neighbouring South Korea, in four of the five principal scoring domains.
Japan’s health system compares especially unfavourably with regard to progress in integrated healthcare and research preparedness, but it also has ground to make up in adequate workforce staffing and in the accountability and patient-centredness of the system. At the same time, it scores well in the provision of a long-term care network. We highlight the report’s key findings below.
Key findings:
Japan’s health financing system is becoming increasingly unsustainable.
The country’s existing price review process acts as a brake on structural health system reform.
Different incentives are needed to efficiently use medical workforce and hospital resources.
Japan’s long-term care system can be a model for other countries but needs better integration with primary care.
Japan lags behind developed country peers in the area of research.
Health system sustainability in Japan: Priorities for structural reform
Japan’s healthcare system has kept the country remarkably healthy with relatively minor changes for nearly six decades. The system provides universal care, generous coverage and the most innovative treatments at a cost that is accessible to all.
Yet the very scope of coverage in the Japanese system obscures the extent to which policymakers have put off making necessary but difficult choices. In particular, the lack of regulation of demand for health services, the pressures of an ageing population and the underdeveloped system for evaluating efficiency and effectiveness of medical products and services could paralyse Japan’s healthcare system as the cost of state-of-the-art medical treatments increase. The economic consequences of this would inevitably reverberate beyond the health system itself.
Without changes in the incentives built into the current system, Japan will struggle to take advantage of medical innovation and to maintain its ability to deliver high-quality, accessible care in the future. As our Health system sustainability in Japan scorecard shows, there are signs that significant fixes to the system may be necessary. Although Japan compares well in many respects to the more expensive and fragmented system in the US, it lags significantly behind the UK and France, and slightly behind neighbouring South Korea, in four of the five principal scoring domains.
Japan’s health system compares especially unfavourably with regard to progress in integrated healthcare and research preparedness, but it also has ground to make up in adequate workforce staffing and in the accountability and patient-centredness of the system. At the same time, it scores well in the provision of a long-term care network. We highlight the report’s key findings below.
Key findings:
Japan’s health financing system is becoming increasingly unsustainable.
The country’s existing price review process acts as a brake on structural health system reform.
Different incentives are needed to efficiently use medical workforce and hospital resources.
Japan’s long-term care system can be a model for other countries but needs better integration with primary care.
Japan lags behind developed country peers in the area of research.
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