SPREAD YOUR WINGS

Kuwait 2016 | DIPLOMACY | GUEST SPEAKER

TBY talks to Stefan M. Stelig, Under Secretary of Commerce and International Trade at the US Department of Commerce, on relations between the two countries and how companies can take advantage of new opportunities.

Stefan M. Stelig
BIOGRAPHY
Stefan M. Selig was confirmed on June 4th, 2014, by the US Senate to serve as President Obama’s Under Secretary of Commerce for International Trade at the US Department of Commerce. As one of the nation’s most senior commercial diplomats, he heads the International Trade Administration, which assists in the development of US trade policy in the global economy; creates jobs and economic growth by promoting US companies abroad, strengthens American competitiveness across all industries, addresses market access and compliance issues, administers US trade laws, and undertakes a range of trade promotion and trade advocacy efforts. Previously, he served as Executive Vice Chairman of Global Corporate & Investment Banking at Bank of America Merrill Lynch. Before then, he was Vice Chairman of Global Investment Banking and Global Head of Mergers and Acquisitions at Bank of America Securities.

The US and Kuwait have long been strong ally nations both politically and economically. What is your assessment of US-Kuwaiti bilateral relations currently?

The US and Kuwait have a long-standing relationship that pre-dates the US' role in Kuwait's liberation from Iraq 25 years ago. Five generations of Kuwaitis have studied at the university level in the US. The US and Kuwaiti militaries have worked closely for decades, while our automobiles have been sold here for over 70 years. Currently, Kuwait is a strong ally in supporting efforts to stabilize the region and fight against terror organizations such as ISIL. There are hundreds of US restaurants and retail stores throughout Kuwait. There is great interest in procuring the latest technologies from US companies. All this means that the bilateral relationship is as strong as it has ever been.

Bilateral trade volumes between the two nations exceeded $15 billion in 2014, up 188% from $5.2 billion in 2009. To what do you attribute this growing interest in the Kuwait market?

Kuwaiti citizens have a high level of disposable income. There has always been an interest in US vehicles and that continues to grow, with US fashion and food also of high interest to Kuwaitis. The US exports a lot in the oil and gas sector as well as in the education sector. Within the GCC region only, Saudi Arabia sends more students at the university level to the US than any other. With the globalization of the world's economy and the success US companies have experienced in previous years in Saudi Arabia, the UAE, and Qatar, it is only natural for companies to continue their growth efforts and look to expand to Kuwait as well.

Kuwait is the 37th major foreign investor in the US with $1.3 billion and the US is also the largest market for Kuwaiti imports. Which areas of bilateral trade and investment between the US and Kuwait do you identify having the most potential for growth?

There are several areas of opportunity for US companies in Kuwait. The number of Kuwaitis that pursue higher education opportunities in the US continues to grow. There are significant projects in the oil and gas sector as well as in alternative energy as Kuwait seeks to increase its production of renewable energy to cover 15% of Kuwait's electricity needs by 2030. Kuwait's National Development Plan 2015-20 incorporates a number of large infrastructure projects, including plans for airport expansion and construction of a new terminal, the construction of a metro rail system and additional rail projects, a new Kuwait University campus and other educational projects, and the expansion of seven hospitals and construction of two additional new hospitals, among other major developments. In all of these areas, there will be contracts for project managers and consultants, architects and designers, engineers, technical experts, and for firms that can provide human capital training and development programs. Additional areas of opportunity abound in the automotive, defense, healthcare, information technology, and environmental technology sectors.

While Kuwait is currently the fifth largest market for American goods among Arab nations, it is the fastest growing in terms of US exports in the GCC, up 41% in 2014. How can US-Kuwait trade relations be enhanced so that investors and companies may trade and invest with greater ease?

While there are many excellent opportunities in Kuwait for US companies, improvement to the regulatory environment would help increase the trade relationship even more. There has been progress with the implementation of a new law allowing up to 100% foreign owned entities, a new public-private partnership law, and the creation of the National Fund for SME Development that supports SMEs and entrepreneurs in an effort to develop the private sector in Kuwait and diversify its economy. But more can always be done. According to the World Bank, Kuwait ranks 101st in the world, and sixth in the GCC, in ease of doing business. Reducing the number of steps required to do business in Kuwait would improve efficiencies, lower costs, and increase the already excellent trade relationship we have.