Seven decades of expanding oil production have given Kuwait one of the world’s highest GDP-per-capita ratios. The generous welfare system guarantees free education, health care and housing, while also providing subsidised utilities. GDP growth reached 4.5% in 2013 and is expected to rise to 5% in 2014.
10 13 14 15 17 28 19 21 25 36 37 38 Kuwait in figures Stability brings rewards: Oil revenues support efforts to diversify growth Interview: Emir Sheikh Sabah Al Ahmed Al Jaber Al Sabah Interview: Prime Minister Sheikh Jaber Al Mubarak Al Hamad Al Sabah Linking up the region: Rail investment in the GCC adds promise to increased trade Viewpoint: Christine Lagarde, Managing Director, IMF Interview: Lim Hng Kiang, Singapore Minister for Trade and Industry Growth story: Momentum continues to help build the non-oil-and-gas economy Interview: Pham Binh Minh, Deputy Prime Minister & Minister of Foreign Affairs for Vietnam Building for the future: Opportunities are being created by the National Development Plan, which is set to run through to 2035 Partners in development: Offset programmes to harness foreign expertise Interview: Faisal Al Ayyar, Vice-Chairman, Kuwait Projects Company Interview: Meshaal Jaber Al Ahmad Al Sabah, Director-General, Kuwait Direct Investment Promotion Authority The banking sector is considered to be the backbone of the non-oil economy. The industry has posted steady growth since the global downturn and total assets of local banks were $190.2bn at the end of the first quarter of 2014, up from $181.1bn at the end of 2013 and $158.6bn at the end of 2012. Banking and financial sector legislation that was enacted during 2009 has been helping improve stability in the sector. Legislation for investment: New FDI law set to accelerate economic growth Interview: Abdulwahab Al Bader, Director-General, Kuwait Fund for Arab Economic Development Laying solid foundations: Reforms to welfare spending and subsidies to prepare public finances for challenges ahead Encouraging entrepreneurs: New measures to stimulate growth of small and medium-sized enterprises Steady and stable: A strong focus on improving asset quality and ramping up reserves has paid dividends Interview: Mohammad Al Hashel, Governor, Central Bank of Kuwait Interview: Fahed Boodai, Executive Chairman, Gatehouse Bank Facilitating credit: Lending picks up on the back of encouraging economic signs Mixing it up: A recent drive to diversify bodes well for future stability Building the bourse: New developments have had a positive impact on the exchange Interview: Faisal Sarkhou, CEO, KIPCO Asset Management Company Recent performance: Growing activity on the bourse reflects new optimism in the market Added options: The introduction of derivatives is set to transform the market Stocks & bonds Share analysis & data provided by KIPCO Asset Management Company Agility: Logistics Gulf Bank: Banking Kuwait Finance House: Banking KIPCO Group: Financial services Zain Group: Telecommunications The banking sector is considered to be the backbone of the non-oil economy. The industry has posted steady growth since the global downturn and total assets of local banks were $190.2bn at the end of the first quarter of 2014, up from $181.1bn at the end of 2013 and $158.6bn at the end of 2012. Banking and financial sector legislation that was enacted during 2009 has been helping improve stability in the sector. One of the foremost and earliest players in the global market for Islamic financial services, Kuwait could soon see the segment play a larger role in the banking sector. Half-way through 2013, Kuwait housed more than $70bn in sharia-compliant banking assets, around 6% of the global total. Half of the country’s 10 domestic banks were fully sharia-compliant, and all of its conventional operators are in some way active in the segment. Just rewards: A key player in the global sharia-compliant financial industry Demand for debt: The domestic sukuk market is poised for a period of expansion Crossing borders: Focusing on trade finance to diversify income and boost foreign exposure Full cover: Despite a number of hurdles, expansion is on the cards Protecting the workforce: A new state-led insurance scheme aims to boost employment 96 103 106 113 115 117 119 123 128 130 132 138 140 144 145 Straight to the top: Recent investments and an ideal location bode well for the sector Shining example: A new terminal at the main airport offers several advantages Essential upgrades: The country is moving forward with new projects All eyes on production: Developing expertise with the help of international oil companies to raise output Work in progress: Upgrading the state’s refineries to improve quality and boost exports Gaining momentum: Enlarging the grid with an array of new projects Key alternatives: Expanding renewables capacity to meet growing demand Developing on all fronts: A multi-faceted approach carries the country forward Growing pains: Working to address the sector’s remaining hurdles Interview: Riyadh Al Saleh, Chairman & CEO, Kharafi National Rising from the sand: The sector turns to new greenfield developments A place to call home: The dearth of supply means many Kuwaitis are waiting for government housing to be constructed Gathering speed: Faster connectivity and an independent regulator are set to shake up the sector Boosting capacity: Telcos are poised to introduce LTE-Advanced networks Moving forward: Expanding fibre-optic networks are expected to help the sector meet demand for sophisticated services As new discoveries are being made in the north of the country, and as the industry develops increasingly sophisticated extraction technologies, Kuwait’s hydrocarbons revenues should see a new boost. The authorities are also seeking to develop the country’s natural gas resources, as these could provide a valuable alternative for electricity generation, which is currently dependent on oil-fired plants. Although the country was ranked as the world’s sixth-largest oil producer in 2013, the government still has its eyes set on energy diversification, with solar energy being the most promising option.
150 152 157 160 166 167 171 177 178 181 186 187 188 191 201 204 206 208 Cutting edge: Cloud computing is receiving significant investment Stream on: Rising oil production is having knock-on effects for a number of industries Build or bust: Investments in petrochemicals are aimed at markets in East Asia Staying strong: A solid economy and growing population bode well for future growth Shop ‘til you drop: The sector is expected to see an expansion of retail space Middle ground: Consumers are keeping an eye on value Closing the gaps: Sector reforms and increased capacity are needed to meet future demand Frame of reference: A look at the government’s plans for educational reform Interview: Fahad Al Othman, Chairman, American University of the Middle East Turning the dials: The government is making strategic policy adjustments to stay ahead of trends in health care Interview: Qais Marafie, CEO, Kuwait Life Sciences Company Changes of style: Faced with a rise in non-communicable diseases, authorities are trying to persuade people to live healthier Increasing provision: Ongoing efforts to tackle growing demand for health services caused by population growth and lifestyle changes Al Tamimi & Co.
Keeping compliant: New rules for corporate governance go into effect in 2014 Interview: Alex Saleh, Partner, Al Tamimi & Co. Sweet dreams: A look at some of the leading local hotels and resorts Listings: Contact information for government ministries, embassies and more Facts for visitors: Useful tips for business and leisure travellers Although growth in real estate slowed during the global financial crisis, the sector subsequently rallied to become one of the best-performing non-oil industries in Kuwait. Following recovery in 2011 and 2012, real estate growth increased significantly in 2013, driven by rising residential demand and strong performance in the investment and commercial segments. Kuwait’s public education system now enrols some 60% of the nation’s nearly 600,000 pupils, although private education continues to be popular. To address the demand currently straining tertiary institutions, a second public university is set to open in 2015. Meanwhile, public institutions are seeking to address the nation’s deficiencies in research & development.
Efforts to diversify the economy away from hydrocarbons have helped drive industrial development. Non-oil GDP saw 10% growth in 2012, and during the 2006-12 period, manufacturing made up an average of 6.4% of GDP a year. In early 2013, the government announced a new $7bn fund to develop SMEs and help support further diversification.
With $3.2bn in projects planned, the private sector can look forward to a greater number of partnerships with the government. The country faces the challenge of boosting capacity as population growth and the rising incidence of non-communicable diseases put increased pressure on the system.
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