Medical Tourism in Developing Countries

36 ● Medical Tourism in Developing Countriesbe high tech and state of the art; the facilities are sophisticated and clean;the service is impeccable. Medical tourism is not sold to cruise passengerson a land package, like handicrafts at a port stall. It is not sold on the worldmarkets through large Western multinationals that control the entire verticalproduction process. It is not a cash crop extracted from the land. Indeed,none of the five characteristics of dependency theory described by DudleySeers are applicable to medical tourism. The foreign capital and technologythat was transferred did not play a negative role on the receiving regions, aswill be argued in chapters 4 and 5. In the case of medical tourism, internalpolicies (discussed in chapter 4) are more important than internationalforces. While it is too soon to judge what the benefits of medical tourismwill be for development on a national level, there is no doubt that incomeis being generated and that there are spillover effects throughout the economy.Moreover, the role of international capitalism is not large as mostinvestment in the medical part of medical tourism comes from domesticsources (this is different for nonmedical tourism such as hotels and rentalcar businesses). Lastly, the development of medical tourism does not blockeconomic development and prevent industrialization. It might be arguedthat the development is distorted since it fosters health care for rich foreignersand away from public health, but that is a preventable possibility, entirelyin the hands of the public sector policy (to be discussed in chapter 6).The above aspects of dependency relate to the big picture and the sweepingeffects of foreign capital on third world countries. Honing in on themarkets for the goods produced by those countries will shed further lighton why medical tourism is not like peanuts. The issue of elasticity ofdemand, both price and income, is crucial.Simply put, in the colonial and post-colonial periods, many developingcountries produced cash crops for export while importing manufacturedgoods. The terms of trade worked against them because of different elasticitiesof demand for agricultural and manufactured goods. The global demandfor primary products is characterized by relatively low income elasticity ofdemand—in other words, as incomes across the world rise, the demandfor agricultural products will not rise proportionally (people will not buysignificantly more peanuts just because they have more money). Incomeelasticity of demand for manufactured goods is high since people will buymore cars, music systems, and refrigerators as their income rises. Withrespect to price elasticity of demand, again there is a difference betweenagricultural and industrial goods. Price elasticity for primary products suchas food is low while it is relatively higher for manufactured goods.Then tourist interest in the developing world exploded. It was rare tohave an abundant factor of production (natural capital) whose demand was