The Economics behind Mask Mania in the Middle East
Friday، June 19، 2020
Sales of medical masks, gloves, adhesive tapes and other protective equipment have soared in the Middle East after the spread of COVID-19 and especially after the WHO raised the virus global threat assessment to its “highest level” on February 29. This led to an increase in demand for masks to a degree of “obsession" at times, raising regional concerns after the increase in its price along with risking its supply and the formation of a parallel market.
Although the subject of medical masks may fall under public health matters, measures taken to address its economic use actually have to do with the adopted governmental policies to deal with fighting the pandemic on state levels. These policies include, but are not limited to, enhancing healthcare infrastructure, monopoly prevention, consumer protection, relaunching inactive factories specifically after the disruption of imports from China as one of the largest global masks suppliers.
Demand for masks has grown, especially as many families try to avail them for their children during school seasons in addition to workers in tourist companies, causing a significant increase in their prices, while their supply has declined. With the increase in prices o in many countries, they have become scarce, as many pharmacies resort to holding them, while some merchants collect the largest amounts for export. Additionally, a parallel (black) market for selling them is formed by some without meeting the specifications to achieve huge financial profits.
It is worth noting the calls for raising awareness about the importance and timing of using the masks. For example, last February, the Head of the Division for Medical Supplies at the Cairo Chamber of Commerce, Mohammad Ismail Abdou, called on citizens to refrain from buying masks, as they do not guarantee full protection against Coronavirus. He recommended “maintaining personal hygiene and staying away from infected areas rather than wearing a mask that provides limited protection".
Other countries, such as Jordan, have relied on substitutes for masks, such as the shemagh (Arabian headdress) for prevention. On February 25, Saad Jaber, Minister of Health mentioned over a call on Jordanian TV, "the National Committee and the medical teams declare that the shemagh is an effective substitution for the mask, if washed and sterilized periodically...Let us go back to our origins by wearing the shemagh. It also prevents kissing which is a positive thing”. Jaber stressed that "Jordan has banned export of masks and medical supplies for virus prevention". However, the WHO has confirmed that "the shemagh is made of normal fabrics unlike the masks, which makes it ineffective".
Several indicators clarify the economics behind the pricing and supply of masks worldwide, including the Middle East.
1- International statements made about the shortage of medical masks: on March 4, Tedros Adhanom Ghebreyesus, WHO Director-General, demanded that the world cease hoarding masks, gloves and other protective equipment, as he is concerned that Covid-19 may disrupt the supply of protective equipment, including the much-needed masks to protect health workers who are combatting the global outbreak.
He also mentioned that "shortages are leaving doctors, nurses and other front-line health-workers dangerously ill equipped to care for COVID-19 patients due to limited access to supplies such as gloves, medical masks, respirators, goggles, face shields, gowns and aprons. We can’t stop COVID-19 without protecting our health-workers”. These statements came after French President Macron announced that his government would demand all existing and future stocks of protective masks.
2- Issuing of ministerial decrees setting the prices of medical masks: This resembles what happened in Kuwait, where Minister of Trade and Industry, Khaled Al-Roudhan, issued a ministerial decree on February 24, 2020 setting the prices of medical masks, based on a decree from the Minister of Health regarding rates of masks in the private sector to range from 100 Fils to 1.320 KD per mask.
The decree states that "the specified prices are the maximum rates for selling medical masks and can not be exceeded”. He warned that "anyone who violates this decree incurs the penalties stipulated in the Kuwaiti law for the supervision on trade in goods, services, and crafts andw fixing their rates". The Ministry of Trade and Industry stresses that the Commercial Control Department has put a plan to monitor the prices of medical supplies in pharmacies and medical centers to assess their compliance with the established standards and regulations.
3- A parliamentary discussion about the lack of masks and their high prices: From the beginning of February until early March, the Health Committee in the Egyptian parliament has discussed a number of briefing requests and urgent statements on the plan of the Ministry of Health to address shortage in medical masks and the soaring prices due to the increasing demand, especially after the ministry announced the discovery of the first Coronavirus case.
4- Relaunching inactive plants for producing masks: The boom in the masks’ manufacturing market has led to a relative rise in relaunching inactive governmental and private factories, in many Middle East countries which were often imported from China, Malaysia and Thailand. However, after the virus spread, demand for local products grew, and the stalled factories were relaunched. Moreover, some media outlets indicated that car manufacturers in Lebanon have started allocating lines for mass production of masks.
5- Increasing sales of masks online: Some "fake" companies have published stories on social media about people who died of Coronavirus in some countries, with the aim of instilling fear among followers and motivating them to buy large quantities of masks to protect themselves from the virus. This was monitored by some Emirati media, as Emarat Al Youm newspaper indicated on March 4 that "all advertisements of companies that sell masks are from abroad, aiming to exploit the global health crisis and intimidate communities with a deadly disease, given the severity of the law regarding spreading rumors or raising prices".
6- Growth forecasts for “medical masks”: There is a global market of masks being formed of importers, distributors and pharmacy owners. For example, on January 26, 2020, the Kuwaiti newspaper Al-Qabas, quoting Decision Databases, indicated that the global market of medical masks will grow at a CAGR of 10% over the next five years, as its global market value will reach $4.4 billion in 2024 versus $2.5 billion in 2019.
In short, the spread of Covid-19 in the Middle East has led to a heightened demand for masks, which has become indispensable for ordinary citizens and medical staff alike, raising questions about the efficiency of the existing healthcare systems in combating the virus spread, especially with the shortage of tools and supplies for medical protection and the weak official control on traders in times of crisis. This necessitates enhancing the role of civil society institutions concerned with consumer protection and access to medicines.