How Israeli healthcare could partner with China-led AIIB

תקציר בעברית בתחתית המאמר

As the world continues to battle against a pandemic of epic proportions, upgrading healthcare systems, developing MedTech innovations, and improving emergency response capabilities have become critical endeavors for countries worldwide. For developing nations that lack the resources to realize these goals, the stakes are higher than ever. Israel, ranked fifth among the 20 “most innovative countries” during the coronavirus crisis, is well-positioned to come to their aid. But launching such a project on a global scale would require significant capital. This raises a question: who would fund it?

As a founding member since 2015, perhaps Israel could look to the Asian Infrastructure Investment Bank (AIIB). The majority of voting shares, 26.5%, are held by China, with the next largest voting shareholder being India with 7.6%.

In November 2020, AIIB was preparing to set up a special unit focusing specifically on healthcare and education infrastructure. AIIB has been considering setting up a unit for quite some time. The devastation caused by COVID-19, exposing weaknesses in healthcare sectors worldwide, has provided new impetus to speed up the initiative. The new department marks a shift for the Beijing-based development bank, which since its inception has traditionally focused on financing infrastructure projects in sectors such as energy, transport, and water.

According to the bank’s president Jin Liqun, the pandemic took a toll on global infrastructure operations, posing a challenge for AIIB. Mr. Liqun said the bank is concerned about “the deterioration of the economic situation of some of its members.” A decline in infrastructure projects leaves funds available for promoting healthcare programs. 

A study conducted by AIIB in March 2020, titled “The Impact of the Coronavirus (COVID-19) and Its Implications for Infrastructure Priorities,” illuminated that there is a direct correlation between the availability of a robust infrastructure such as transportation, water, power, and telecommunications with the ability to provide adequate healthcare for the population.

In a press release published on March 25, AIIB announced: “recognizing that countries with fragile infrastructure have less capacity to handle health crises, the AIIB is working to scale up infrastructure investment – including in public health, healthcare and information and communications technology (ICT) – to better serve members impacted by COVID-19.”

As Erik Berglof, the bank’s Chief Economist told Financial Times, “Covid-19 has shown the importance of the primary healthcare system in offering resilience to pandemics. We saw that in many countries in Asia, the basic healthcare system didn’t hold up very well. That’s clearly something that needs to be addressed.”

AIIB’s first foray into the sector was in April 2020, extending an emergency loan amounting to $355m to the People’s Republic of China in order to support the public health response to Covid-19 in Beijing and Chongqing. AIIB also set aside $13 billion to aid its members’ recovery from Covid-19 and injected $ 30 million into Legend Capital Healthcare Technology Fund, which invests in healthcare technology and digital hospital companies in China. 

According to AIIB representatives: “The project aims to foster more mature applications of technology and digitalization to improve capacity, efficacy, inclusiveness, and resilience of the Chinese healthcare infrastructure and service delivery.” It seeks to “facilitate technology applications and digitalization of the healthcare industry in China.”

Since then, AIIB has expanded the reach of its funding, launching a series of global initiatives. According to South China Morning Post, as of July, around $6 billion has already been invested, including a loan of roughly $300 million to Russian Railways (RZD) to assist them in sustaining their operations during the crisis. Meanwhile, in Turkey, AIIB approved a loan of EUR70 million to strengthen its healthcare emergency response against the COVID-19 pandemic in August 2020. 

According to the bank: “The project, cofinanced with the European Bank for Reconstruction and Development, will scale up public hospital infrastructure capacity with critical hospital equipment, and reduce the funding gap in the Turkish Government’s emergency health program. AIIB’s financing will support the quality upgrade of physical infrastructure in designated Istanbul pandemic hospitals and selected public hospitals. It will also increase access to health infrastructure. The project is funded by the AIIB COVID-19 Crisis Recovery Facility (CRF).”

AIIB also provided $ 100 million to Uzbekistan for a healthcare emergency response unit. Notably, in May 2020, against the backdrop of rising geopolitical tensions between China and India, the AIIB even approved a $500 million loan to support India’s Covid-19 operations. The bank also authorized a $100 million loan for Mongolia’s COVID response. 

The bank continued these efforts through 2021, provided $300 million to the Philippines in February, co-financed with the Asian Development Bank (ADB) to procure vaccines eligible under ADB’s Asia Pacific Vaccine Access Facility (APVAX) program. Later in March, AIIB awarded EUR116.27 million to Belarus for emergency response and public healthcare support projects within AIIB’s COVID-19 Crisis Recovery Facility (CRF) framework. 

Considering Beijing’s drive to promote healthcare infrastructure development coupled with AIIB’s initiatives to support China’s call, Israel may be able to tap into these funds. Jerusalem could seek to establish trilateral cooperation that would see the Chinese Bank finance Israeli healthcare projects in developing nations. Healthcare Israel, a body established by Israel’s Ministry of Health to “promote broad and long-standing cooperation between the Israeli Ministry of Health and partner governments,” is well-positioned to lead such an initiative.

Healthcare Israel is already working in locations from Brazil to China. It provides an opportunity for countries to benefit from Israel’s advanced medical innovation and expertise from emergency preparedness to rehabilitation, from Israel’s successful HMO model to telemedicine, involving the top solutions from across Israel’s healthcare ecosystem.

Through HCI, Israel could capitalize on AIIB’s plans to play a significant role in transforming health and education infrastructure by harnessing digital technology and its applications. Israel’s prowess in the digital realm makes it a relevant potential partner. 

Given that countries have recently become more suspicious of China’s BRI infrastructure support, transitioning into health and other areas may broaden AIIB’s appeal while producing real good.  

As Ayşe Kaya, associate professor of political science at Swarthmore College, told Financial Times, “Adding ‘soft’ infrastructure projects to its portfolio opens the possibility of the AIIB becoming a ‘one-stop shop’ for regional development.” Prof. Kaya went on to explain that “this will increase the institution’s competitiveness and help distance it from China’s contentious Belt and Road Initiative.” 

Perhaps ironically, medical tech and healthcare systems being rolled out globally would likely fall under the “Health Silk Road” banner, a component of the BRI. 

It is important for Israel to factor in the US in the context of its increasing scrutiny of Jerusalem’s ties with Beijing.  When considering US concerns, Israel will take note that these projects fall within the realm of humanitarian assistance, a less sensitive domain than the transfer of advanced technology such as semiconductors and cybersecurity.

There are indeed many opportunities for Israel to explore in cooperation with the AIIB when it comes to healthcare systems and medical technology provisions to support developing nations in their COVID response and recovery efforts.

המאבק בקורונה מוסיף לעמוד בראש סדר היום של כל מדינות העולם. בקרב ממשלות רבות מתחזקת ההבנה כי שדרוג מערכות הבריאות, קידום המחקר והפיתוח של טכנולוגיות רפואה ושיפור מערך החירום, הם הצעדים הקריטיים ביותר בדרך להתגברות על המגפה. אולם, לרוב המדינות המתפתחות חסרים המשאבים להשגת מטרות אלה.
ישראל, אשר נחשבת לאחת המדינות המובילות בעולם בתחום החדשנות והטכנולוגיה, יכולה בהחלט לסייע לאותן מדינות. מקור מימון פוטנציאלי לסיוע הוא “הבנק האסייתי להשקעה בתשתיות” (AIIB), בו ישראל היא אחת המדינות החברות. ה- AIIB הוא בנק בין-מדינתי, שבו סין מחזיקה בנתח השליטה הגדול ביותר. לבנק היו תוכניות למימון יוזמות בתחום הבריאות כבר זמן רב, אשר הואצו עקב הבנת ממדי ההרס של המגפה. מאז פרוץ המגפה, הקצה הבנק הלוואות ומימון בהיקפים עצומים לפרויקטים בתחום הבריאות.
HealthCare Israel הוא גוף שהוקם על ידי משרד הבריאות הישראלי, ואשר נועד לקדם מיזמי שיתוף פעולה ארוכי טווח עם ממשלות ברחבי העולם. HCI כבר פועל כיום במישור זה במקומות שונים בעולם ומאפשר למדינות להנות מהחדשנות הישראלית בתחום הרפואה, וללמוד ממערכת הבריאות הייחודית והמתקדמת של ישראל. הארגון נמצא בעמדה מצוינת להוציא לפועל יוזמה שכזאת, שכן יש לו את הידע ואת הניסיון. אם ישראל תשכיל לנצל יתרונות אלה בצורה הנכונה – ל- HCI יהיה גם את המימון.