Though it is a tiny country in terms of population- just 2.8m, of which only 35% are native- Kuwait is vital to the health of the global economy. Indeed, in 2007 it is enjoying its strongest economic position in
years, with high oil prices pouring money into the country and feeding fast economic growth in both the public and private sectors. However the government remains committed to diversifying its economy away from near complete-dependence on oil revenue.
ISSN (Online): 1752-9018
TABLE OF CONTENTS
Balancing strong ties with world powers and a pragmatic approach to domestic reform, Kuwait has maintained a steady keel in a difficult region. The emir has pressed ahead with domestic reforms, granting women the right to vote and investing the country's oil wealth in infrastructure, education and rainy-day funds. Kuwait continues to play a key role in regional affairs and has strengthened its ties with new Asian powers. This section includes interviews with Sheikh Nasser al-Mohammed al-Ahmad Al Sabah, Prime Minister of Kuwait, Cherie Booth QC, founding member of Matrix Chambers, Mohammed al-Sager, Speaker of the Arab Parliament, and Rola Dashti, Chairman of the Kuwait Economic Society. In addition, Sheikh Sabah al-Ahmed al-Jaber Al Sabah, Emir of Kuwait, contributes an article on his vision of the country's future.
Coming into 2007, the country was enjoying its strongest economic position in many years, as high oil prices resulted in a remarkable windfall for the treasury. This in turn led to rapid economic growth, investment and expansion in both the private and public sectors. Despite the immense wealth being enjoyed by the nation, the state remains committed to its plan of creating a fund for future generations, including money and assets with which the country will be able to maintain itself long after its vast oil reserves have run out. In this section, OBG interviews Bader Mishari al-Humaidhi, Minister of Finance, Faisal Hamad al-Ayyar, Managing Director & CEO of KIPCO Group and Mustapha Kamel Nabli, Chief Economist for the MENA region at the World Bank. HRH The Duke of York, UK Special Representative for International Trade & Investment, offers a viewpoint on the Kuwaiti economy and its links with Britain.
The banking sector began 2007 more dynamic and developed than ever before. Institutions enjoyed steady growth throughout 2006, in all indicators, as a result of the country's remarkably strong economy. Reformed legislation saw the first wholly foreign-owned banks opened in years, while Islamic financial institutions strengthened their position based on deposits and financing. Also in this section, an interview with Sheikh Salem Abdul-Aziz al-Saud Al Sabah, Governor of the Central Bank of Kuwait.
ISLAMIC FINANCIAL SERVICES
The market for sharia-compliant financial products is growing, as more and more Kuwaitis either switch to Islamic banks from conventional ones or open their first bank accounts. While some sticky issues remain, such as which products truly meet religious criteria, new regulations and increasing competition are laying the groundwork for a competitive, healthy market. Along with an in-depth overview, OBG interviews Adnan al-Musallam, Chairman of Investment Dar, while Ahmed Abisourour, Senior Advisor at Boubyan Bank, contributes a viewpoint.
While 2006 will not go down as the best year for the Kuwait Stock Exchange, a broader view shows that the market did, in fact, continue to develop, with more firms listed, more investors registered to trade and a gradual opening to the wider region. A growing number of non-Kuwaiti stocks are regularly traded on the exchange, and thousands more individual foreign investors are now registered. In this chapter, OBG interviews Wafa Mohamed al-Rasheed, Director of the KSE's Technical Bureau Department, and Maha al-Ghunaim, Vice-Chairman and Managing Director of Global Investment House.
In a sector that remains dominated by ten Kuwaiti firms, life and accident insurance are among the fastest growing market segments. In health and pension insurance, efforts to serve the large expatriate market run into regulatory problems. Some progress in the sector may be heralded by the formation in 2006 of an insurance industry association.
While riding the wave of military contracts driven by the Iraq war, local logistics companies try to ensure long-term growth based on a steadily swelling commercial sector. Meanwhile, the government has pledged to invest in much-needed road-building and sell off the loss-making national airline. This chapter also includes a viewpoint article by Raghu Sarma, Senior Financial Analyst at Global Investment House.
Long a key international player in hydrocarbons, the country still maintains its position as one of the top oil-producing nations in the world. Now, as surging oil prices pour even more funds into the national coffers, the government is putting plans into action that will increase recovery and capacity as well as diversify the range of products being manufactured, sparking debate on the role of IOCs. This section includes interviews with Hani Hussain, Vice-Chairman and CEO of KPC, Sami al-Rushaid, Chairman & Managing Director of KNPC, Sara Akbar, CEO of Kuwait Energy, as well as a viewpoint article from Mohammed Barkindo of OPEC.
Making up for lost time, Kuwait is seeing fast development in what has not traditionally been one of its strongest industries. New hotels aplenty and large island resort projects are among the investments currently being conducted. The industry expects growth in both business and leisure visitor numbers, as well as increased domestic tourism. Developments are particularly focusing on the top end of the market. The chapter also features a viewpoint article contributed by Tareq al-Kazemi, Deputy Chairman of the al-Kazemi Group of Companies.
CONSTRUCTION & REAL ESTATE
The country's rapid economic growth has brought an unprecedented expansion of the construction industry, with demand continuing to rise on all fronts, from transport infrastructure, commercial and investment property to large-scale residential real estate developments. This chapter features interviews with Ayad al-Thuwainy, Vice-Chairman of Ahmadiah Contracting & Trading Company and Ossama Bukhamseen, Managing Director of Bukhamseen Group.
TELECOMS & IT
With a dynamic mobile market and a population that seems determined to stay at the cutting edge of the latest technology, Kuwait has created two of the world's most important private mobile telecoms companies. But this duopoly looks likely to end, as there are plans for a third operator to enter the market. In the meantime, the government is considering a move to privatise part of its fixed-line network. As for the country's IT infrastructure, despite an early lead, it now lags behind Gulf neighbours. Also in this section, an interview with Harri Koponen, CEO of Wataniya.
The prominence of the oil industry has traditionally constrained the development of the non-oil sector. But the situation is now improving, especially in sub-segments such as processed food, concrete, chemicals, textiles, steel, metal piping, cables and wood products. In the years 1999-2004, total manufacturing GDP was up some 12.2%. This chapter includes an interview with Omar Alghanim, CEO of Alghanim Industries.
An increasingly wealthy and brand-conscious population, both local and expatriate, is being served by a growing variety of malls, some of them truly colossal. International big-name retailers and the hypermarket format, are making promising debuts. This section includes an interview with Mohammed Alshaya, CEO of Alshaya Group. MEDIA & ADVERTISING
MEDIA & ADVERTISING
A surprising degree of freedom has transl ated into an impressive array of media outlets. Print and television are being followed by radio, a sector whose liberalisation has led to the first private station being launched. But on certain sensitive issues, media need to avoid crossing “red lines.” The advertising sector is growing and creativity is being shown in campaigns, as the sector opens up to foreign entrants.
HEALTH AND EDUCATION
Recent years have seen rapid developments in the healthcare sector, spurred on by population growth and the increasing popularity of elective or previously rare treatments. Meanwhile, private universities are seeing greater prosperity, and are gaining acceptance among citizens and government in the face of economic expansion and private sector demands.
Perhaps the defining moment in Kuwait's recent history was its liberation in 1991 from Iraqi occupation under Saddam Hussein. The Liberation Tower now dominates the skyline of the capital city, and since the conflict, the country has enjoyed a period of stability. Growing confidence and the boom in oil revenues have translated into a wave of foreign investment.
OBG's partner in Kuwait, PricewaterhouseCoopers, provides a look at the ins and outs of the country's tax system and its laws for foreign businesses, with some significant changes ahead. The section also features an interview with Thomas A. George, Partner at PricewaterhouseCoopers, and a viewpoint from Sam Habbas, Senior Partner with al-Sarraf & al-Ruwayeh.
This section includes a focus on Sheikh Nasser Sabah al-Ahmad Al Sabah and his wife, Sheikha Hussah Sabah al-Salim Al Sabah, who have spent years creating and expanding Kuwait's collection of Islamic art and Indian jewellery from the Mughal period. The Al Sabah collection of Islamic art, known in Arabic as the Dar al-Athar al-Islamiyyah, gained international prestige during its world tour, and has inspired the country's youth to take up the study of Islamic art and art history as well as Mughal jewellery-making techniques. Also in this section, hotel listings and top restaurant reviews.
OBG offers a comprehensive directory of government offices, public institutions, foreign missions, law offices, accountancy firms, airlines, car rentals, hospitals and media outlets.
FACTS FOR THE VISITOR
This section offers useful tips for business travelers, on topics like etiquette, currency, visas, language, communications, dress, business hours and electricity.