Four years late but revival starts

17 October 2013

Kuwait will miss its economic targets but may finally be making progress on infrastructure developments

Kuwait’s four-year development programme launched in 2010 to counter the global economic slowdown is now nearing an end, but the targets set out for developing the private sector look certain to be missed.

The aim of the plan was to decrease the country’s dependence on oil revenues and increase the role of the private sector in the economy. In common with other GCC states, the government has struggled to stimulate private enterprise and with oil prices at historic highs, dependence on oil revenues has risen.

In the case of Kuwait, however, it is the failure to accelerate public spending on infrastructure projects that has held back the expansion of the private sector.

While other regional governments have managed to step up project spending, which in turn creates demand for goods and services from private companies, several long-planned schemes have still not made it to the procurement and construction phases.

Once they have been awarded, initiatives such as the $17bn Clean Fuels Project (CFP) and the $14bn New Refinery Project (NFP) promise to have a significant impact on the local economy.

The good news is that as 2013 draws to a close, those energy projects appear to be building momentum. Commercial bids are due to be submitted for the CFP in December, and the project management consultancy contract has been awarded for the NRP.

The impact will not come in time for the current four-year development plan, but there are increasing signs that Kuwait’s projects sector is headed for a revival in the near future.

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