The commentaries and analysis about Iran and its economy share one common emphasis these days: Iran is an isolated country no more, not at least as much before. As the evidence they refer to the exponential increase in the number of foreign visitors, particularly the European ones. It is reported that the number of European visitors in spring 2014 tripled to 23,652 from 7,495. The number is still small compared to almost 4 million foreigners who visit Iran annually. However what matters is the increasing trend and its speed. There is little doubt that tourism has a potential for rapid and impressive growth. For an economy determined to create jobs and even more jobs that is good news.
Current Iranian administration has singled out Iranian tourism as one of country’s top three growth industry. The widespread belief among the policy makers in Tehran is that if the economic growth picks up the job creation follows. While this is true in principle, in reality one must take pragmatic steps to materialize any potential.
The observers and advocates of Iranian tourism industry waited eagerly to see what these steps would be. As of now it seems that Iranian government does not have any plan for short run rapid expansion of tourism. Its economic recovery package includes some references to tourism, in particular to health tourism, but it does not assign a significant role to this sector.
Some argue the expansion of tourism is a long time process and the government is focusing on short run solutions to revive the economic growth. However many cannot help noticing that a change in long run comes as the outcome of several short run changes. It is true that Iran’s tourism compromises only 2.2% of Iran’s GDP, however it is also true that few other industries have a comparable capacity to create employment. At the moment it is not easy to say why tourism did not receive more attention in this package.
Still the government’s emphasis on health tourism is promising. Here one finds a sector with several stakeholders, ranging from healthcare industry to medical schools and hotel owners. The presence of a large number of stakeholders ensures a stable and continuous growth for this sector. As health tourism grows many social groups benefit directly from the surplus it generates. Their invested interest will be the best insurance for any long term investment in this sector. Although it might seem that Iranian government would like to avoid sensitive aspects of tourism expansion, one hardly can find fault with its emphasis on health tourism.
Iran’s health tourism industry benefits from a few comparative advantages. First is Iran’s impressive human capital in healthcare. Iran has an extensive network of medical schools and universities offering training programs covering all medical branches. In the last academic year 29,975 students were enrolled in these programs as medical students with 6,966 pharmaceutical students as well as 8,081 dental students. It is a market fact that an increasing number of medical graduates are seeking employment. Health tourism sector introduces a new market for healthcare workers in Iran, one with huge potential for growth and job creation. The investment in this sector is further encouraged by the supply of medical professionals.
Second Iran’s geographic location provides its healthcare with access to many across the border communities. It is a fact that for many border communities of its bordering countries it is easier and faster to go to an Iranian hospital than braving dangerous roads to go to overcrowded and faraway hospitals in the central parts of their countries. It must be noted Iran’s medical centers are competitive when it comes to cost of medical services, when they are compared globally. For an Afghan family living in Herat, a hospital in Mashhad would be both more accessible and affordable, if the necessary procedures are in place. Iran’s healthcare can serve the region efficiently and effectively.
While emphasizing health tourism is not what many advocates of tourism hoped for, it seems it is a step in the right direction. If its expansion continues unhindered then there is a real stepping stone to embark on an ambitious campaign to promote and to develop tourism in Iran. Then tourism will not be only a road much talked about.
* Ali Dadpay is Associate Professor of Economics at Clayton State University.
