Kuwait’s government plans to create five new private companies and will directly distribute a large proportion of their shares to the country’s citizens as part of a scheme to boost the country’s private sector.
“The plan is to institute five publicly-listed companies and distribute a minimum of 50 per cent of the shares in each of them to the general population,” says Rola Dashti, a member of the country’s national assembly or parliament.
Each firm will develop a different sector of the country’s economy, says Dashti. “There will be companies for power, for construction of real estate and housing, for ports, for healthcare,” she says. “This will turn the Kuwaiti people into investors and wealth creators rather than consumers who depend on oil revenues.”
Kuwait raises more than 70 per cent of its revenues through crude oil and petroleum product sales. The state employs more than 90 per cent of the Kuwaiti population.
As part of its latest five-year plan, the government wants to reduce dependence on the state for employment and create new investment opportunities.
The government has not disclosed how much capital it will allocate to each of the five companies. It is likely to allocate capital to the other four companies in a similar way that it plans to create the country’s new Warba Islamic bank, according to a senior source at the National Bank of Kuwait.
The government announced it will create Warba on 15 September. The bank will receive KD100m ($349m) of start-up capital from the sovereign wealth fund Kuwait Investment Authority, which will retain a 24 per cent stake. The government will distribute the remaining 76 per cent evenly among Kuwait’s estimated 1.1 million citizens.
The government has yet to set a date for the official launch of the bank. According to MPs, it is unclear if the plan needs the approval of the country’s national assembly, which returns from its summer holiday on 27 October.