Kuwait has not had it easy over the past decade. Stifling bureaucracy, political deadlock and a near-static projects market have all taken their toll on the small, oil-rich emirate. But the country’s past problems could yet be turned to its advantage.
The regional investment landscape is not what it was two years ago. Dubai, a former magnet for foreign capital, has had a well-documented series of problems following the financial crisis of 2008-09.
In neighbouring Abu Dhabi, the counter-cyclical investment boom of 2009, into the oil sector in particular, is now over and real estate developments are slowing, with many contractors cynical of the level of real estate growth that can be achieved given an abundance of cheap apartments and houses in Dubai. Much of the remainder of the emirate’s planned projects are state-funded. Saudi Arabia and Qatar remain draws for international investors, but only for established firms.
Kuwait, meanwhile, is throwing its doors open to the wider world. Its Partnerships Technical Bureau (PTB) is helping government ministries and state-run firms to plan 24 projects worth KD6bn ($21bn), all of them public-private partnerships. The PTB and the Energy and Water Ministry plan to start tendering the contract to build and operate the country’s first independent water and power plant in July.
At the same time, the emir, Sheikh Sabah al-Ahmed al-Jaber al-Sabah, is due to sign into law a new privatisation bill, which has already been passed by parliament. Parliament has also agreed to plans to privatise state carrier Kuwait Airlines Company, and bids for the legal advisory for this went in on 8 April.
If the country’s often pugilistic parliament can contain itself, private sector interest in the country should grow exponentially. Already bankers, lawyers and businessmen say that the level of interest in the country is at levels they have never seen before. This can only be of benefit to the country.