Kuwait looks to its future in 2010

22 June 2010

Plans to move ahead with major privatisation schemes shows the state is serious about development

Despite its oil riches and a series of multibillion dollar budget surpluses running from the late 1990s, Kuwait has been constantly frustrated in developing new projects and attracting foreign investment over the past decade.

A tangle of red tape has slowed the process of tendering projects and bringing investors in down to a snail’s pace. At the same time, nationalist groups within parliament have blocked plans to involve foreign companies in the development of the country’s oil resources and petrochemicals industries, arguing that the government wants to auction off the country’s future to line their own pockets.

But the oil-rich Gulf states have not spent the past decade developing multibillion dollar industrial and real estate projects with the sole aim of getting a financial return on their investments. If anything, they have been trying to secure a future for their people, and Kuwait as much as any country in the region needs to start planning for its future.

In 2009, only 30 per cent of Kuwaitis were in employment while 80 per cent of the country’s workforce was employed by the state. Given that as much as 90 per cent of government revenues come from oil exports, this state of affairs will become unsustainable as the population grows to 5.4 million people by 2029.

Kuwait needs to open its doors to private investors, both local and foreign, finding a way to develop new projects which will boost the country’s economy while providing jobs and training for nationals. In 2010, state public-private development agency, Partnerships Technical Bureau, will help ministries tender contracts on 24 projects worth $21bn, while the government will push ahead with plans to privatise state carrier Kuwait Airways Company.

The National Assembly has largely backed these plans; with luck, 2010 will be the year that the country starts working toward a better future for its people.

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