Economy
From The Report: Kuwait 2016
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The story of Kuwait’s economy, like so many of its neighbours, has been dominated by oil. Once a regional port for pearling and fishing, the country was part of regional Gulf trade networks intimately tied to those of the Indian Ocean. Political independence in 1961, along with its huge hydrocarbons resources, helped Kuwait to become one of the top oil producers in the world. Still, the authorities are aware that crude is a finite resource, a fact brought into the spotlight during the recent period of low oil prices. As a result, the economic development blueprint Kuwait Vision 2035 draws on the country’s trading past in order to secure its future. The blueprint aims to re-kindle Kuwait’s history as a commercial centre, while also developing sectors such as finance and real estate to make them even more competitive internationally.

This chapter contains an interview with Sheikh Meshaal Jaber Al Ahmad Al Sabah, Director- General, Kuwait Direct Investment Promotion Authority (KDIPA); and Abdulwahab Al Bader, Director-General, Kuwait Fund for Arab Economic Development.

Articles from this Chapter

Overview

Reform pipeline: Changes are set to encourage progress on national economic diversification plans
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The story of Kuwait’s economy, like so many of its neighbours, has been dominated by oil. Once a regional port for pearling and fishing, the country was part of regional Gulf trade networks intimately tied to those of the Indian Ocean. Political independence in 1961, along with its massive hydrocarbons resources, helped Kuwait to become one of the top oil producers in the world. Still, the authorities are aware that crude is a finite resource, a fact brought into the spotlight during the recent…

Analysis

Taking the initiative: A range of measures to support the growth of SMEs
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With low oil prices continuing to take their toll on the Kuwaiti economy, the government is hoping investment in the small and medium-sized enterprise (SME) sector begins to pay dividends. Indeed, there is significant room for growth in Kuwait’s SME sector: it contributes just 3% to GDP, compared to an average of 50% in high-income economies, according to the latest World Bank figures. Furthermore, SMEs account for roughly 23% of Kuwait’s workforce, about half of the average in high-income and…

Analysis

For sale: Efforts to privatise state assets continue
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In January 2016 Kuwait announced plans to create a new fund to manage its domestic assets, signalling a key step forward in the push to privatise state-owned assets. While the state has experimented with privatisation in the past, the climate of significantly reduced oil prices, which reached a 12-year low in January 2016, has added a greater sense of urgency. Fund Facts The new fund is expected to manage up to $100bn in local assets, which are set be sold to private investors over the next five…

Analysis

In figures: Recent indicators highlight both challenges and potential
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By mid-2016 the period of slow economic growth and falling government revenues that kicked off across the GCC in 2014 was widely thought to have reached an inflection point. The region’s economy is expected to gradually firm up over the medium term. In Kuwait, which like most of its neighbours experienced economic contraction in 2014 and 2015, the World Bank recently projected GDP growth of 1.3% in 2016 and 1.6% in 2017. Similarly, according to the IMF’s 2015 Article IV consultation for Kuwait,…

Analysis

Taking action: In the face of falling oil revenues, GCC governments are introducing subsidy and price reforms
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In a region that produces 20% of the world’s crude, the decline of oil prices was bound to have an impact. For the six member states of the GCC, hydrocarbons are the basis for their economies, a major export earner, and the main source of government funds. The drop in global oil prices that began in mid-2014 has therefore squeezed state revenues and pushed all six into budget deficits for 2016 (and all but Qatar in 2015). To be sure, large fiscal reserves built up during the years of high prices…

Interview

Gearing up: OBG talks to Sheikh Meshaal Jaber Al Ahmad Al Sabah, Director- General, Kuwait Direct Investment Promotion Authority (KDIPA)
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Interview:Sheikh Meshaal Jaber Al Ahmad Al Sabah To what extent has the new package of investment laws had tangible results? SHEIKH MESHAAL JABER AL AHMAD AL SABAH: The approval of our new Investment Law, No. 116 of 2013, came as part of a notable legislative drive witnessed in the last few years to issue new laws and to amend decades-old ones. This host of new economic laws has contributed to making the legal and regulatory framework in Kuwait more pro-business. Law No. 116 of 2013 established…

Analysis

Onward and upward: While some spending cuts and new taxes are on the table, the government plans to move ahead with major projects
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Lower oil prices have significantly affected the Kuwaiti government’s fiscal position. Oil and gas exports make up 90% of public spending. The recent decline in energy prices has resulted in lower oil export revenues, which are projected to fall from $112.9bn in 2012 to $51bn in 2016, according to December 2015 data from the IMF. Tumbling oil prices and reduced revenues have triggered calls from Kuwait’s highest authorities for the parliament and Cabinet to agree on ways to shift the country’s…

Analysis

Money in the bank: Authorities are exploring new ways to leverage the country’s sovereign wealth
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One of the major achievements of successive Kuwaiti governments has been the successful management of the wealth generated by its largest asset, oil. Starting in the 1970s and 1980s Kuwaiti leaders consolidated these resources under the ownership of publically owned entities, and the public coffers have benefitted enormously. Indeed, the steady influx of oil export revenue funds routinely finances about 90% of the country’s public spending. However, as oil prices have tumbled to their lowest level…

Interview

Fund of cooperation: OBG talks to Abdulwahab Al Bader, Director-General, Kuwait Fund for Arab Economic Development
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Interview:Abdulwahab Al Bader To what extent does the fund coordinate with other funds and institutions to prevent overlaps and also create synergies? ABDULWAHAB AL BADER: The Kuwait Fund for Arabic Economic Development has always welcomed cooperation and coordination with other development funds and institutions. In doing so we can mobilise resources for financing proposed projects and adopting agreed policies and procedures for the timely and orderly implementation of co-financed projects.…