Better late than never: Kuwait makes non-oil push to compete with Saudi, UAE
Kuwait in 2017 posted a GDP per capita around $70,000, one of the highest in the Arab region topped only by Qatar, according to the IMF.
The country has not however made any reasonable push to catch up with the developments around it, mainly in the UAE, Saudi and even Qatar, but now it is pushing to modernize, develop real estate and attract foreign investments to its business sectors.
The Kuwait Investment Forum (KIF) is where these and other business announcements were made yesterday.
Kuwait: A Business destination
According to Bloomberg, the eldest son of Kuwait’s ruler Sheikh Nasser Sabah Al-Ahmad Al-Sabah said the OPEC member is revisiting plans to transform itself into a regional business hub to join neighbors seeking to overhaul their oil-dependent economies.
The focus will be on northern regions, where developments could serve neighboring Iraq as it seeks to recover from conflict, and even Iran,’ said Al-Sabah as quoted by Bloomberg.
Silk City, the most ambitious element of the development plan, is slated to be built in the northeast, and be home to around 700,000 people. There are plans for the world’s tallest building, a national wildlife sanctuary, a free-trade zone and parks. It will be linked to Kuwait City by the Jaber Al-Ahmad causeway currently under construction
Bloomberg said Kuwait has cut subsidies and plans to introduce taxes to plug a budget shortfall triggered by lower oil prices.
“But as in Saudi Arabia, where the 32-year-old crown prince is leading a push to wean the kingdom off its oil dependency, there’s a recognition that this won’t be enough in the long run,” said Bloomberg.
Pace of reforms
New investment rules and other regulations are expected to be completed this year.
“Reforms may take longer than in absolute monarchies such as Saudi Arabia, though, because in Kuwait the government must work “with a constitution and parliament,” Al-Sabah said.
Bloomberg said Kuwait also wants to run a global cable network that will increase Internet traffic and cut the reliance on the link that runs through Egypt and Saudi Arabia, quoting Noura Al-Qabandi, director of international affairs at the country’s telecommunications regulator, CITRA.
Kuwait Prime Minister (PM) Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah stated that the call to foreign direct investment in the State of Kuwait is relatively new but it is honest and promising.
“Although foreign investment is still undergoing development through legislations and other regulatory initiatives, it is indeed in a state of maturity where foreign investments are treated the same as local investments without complication or discrimination,” the PM said.
He also noted having “a stable democratic political scene, an independent and lawful Judicial System and an Honest Private sector, in addition to having reserves that allows it to cross the bridge of transformation with confidence and efficiency.”
The PM said foreign companies are able to own 100% of the shares and are not subjected to the local partnership policy.
Projects include Boubyan, a production island that will be split into a manufacturing zone, an information and communication zone, a logistics zone and a world-class port connecting the island to the rest of the world alongside railways.
Also Warba is a touristic island that will host world class resorts, recreational activities and medical facilities.
First Deputy Prime Minister (DPM) and Defense Minister Sheikh Nasser Sabah Al-Ahmad Al-Sabah said preliminary studies indicate that a national plan to develop Kuwaiti islands could help provide more than 200,000 jobs and generate annual revenue of more than $35 billion.
Kuwait Time reported that Boeing recently announced a plan to open a permanent office in Kuwait this year.
“Recent studies by the giant US aircraft manufacturer have shown that by 2035, Kuwait needs 36,000 pilots and around 100,000 crew members,” Timothy Keating, Executive Vice President of Government Operations for Boeing, said in his speech at KIF.
Kuwait Times said the country is rolling out investment partnerships and strategic investment opportunities valued at more than $100 billion in key economic and social sectors for investors that include information and communications technology, oil and gas, renewable energy, electricity and water, urban development and housing, healthcare, education, transport, tourism and the North Zone development, as part of Kuwait vision 2030.