DEVELOPMENT ASSISTANCE

Kuwait 2017 | DIPLOMACY | B2B

Offering valuable external opinions, these institutions want Kuwait to make progress with the implementation of PPPs, forming partnerships to build a better future.

Dr. Hasan Merza
DR. HASAN MERZA
Executive Director
World Bank Group
Dr. Hanan Hamdan
DR. HANAN HAMDAN
Head of Kuwait Office
United Nations High Commissioner for Refugees (UNHCR)

The Kuwait Authority for Partnership Projects (KAPP) has crucially facilitated the influx of foreign companies to Kuwait. Which sectors and industries in Kuwait hold the most potential for PPPs?

DR. HASAN MERZA The main issue with Kuwait is the capacity to implement; we need to transition from vision to implementation and strengthen institutions in order to have the ability to implement projects. There are a few sectors that need to go to the private sector and utilize these partnerships. However, first a great deal needs to change in Kuwait's business environment. The water and electricity sectors and certain service industries are currently ripe for PPPs. The main obstacle is the environment for doing business in Kuwait. The Kuwait Direct Investment Promotion Authority (KDIPA) has placed a great deal of effort into changing this environment because it is a prerequisite for any PPP project. Kuwait has the relevant laws now and there are attractive industries here, especially in the downstream oil industry; however, Kuwait needs to finetune the regulatory system and business environment, which is what KDIPA seeks to do in Kuwait. There are companies interested in coming into Kuwait to develop their business in certain sectors; however, this will be difficult without a clear regulatory environment on tariffs and ownership. This is where conditions need to be changed in order to have a successful implementation of the PPP law.

How does UNHCR partner with funds and the private sector in Kuwait?

DR. HANAN HAMDAN In 2015 and 2016 important partnerships started evolving with the funds and the private sector. An MoU was signed with the Kuwait Fund for Arab Economic Development (KFAED) during the visit of the HC to Kuwait in May 2016 and a field visit to Iraqi Kurdistan was conducted in January 2017 to look into the possibilities of supporting refugees and internally displaced people. In terms of the private sector, UNHCR successfully established key relationships with multinational Kuwaiti conglomerates including Zain Telecommunications Company and Alghanim Industries, which have committed to promoting UNHCR's mandate and advocacy efforts. On April 19, 2016, UNHCR signed a cooperation agreement with Zain Telecommunications Company in the UN-House, Kuwait, with the sole objective of supporting refugees worldwide through UNHCR. More recently, a field visit was done with Zain to the refugee camps in Jordan in January 2017, and an online campaign to raise funds for winterization assistance for Syrian refugees was launched in November 2016 in collaboration with UNHCR. The campaign, which ended in January 2017, was titled #ZainwithRefugees, in addition to another campaign launched a few years ago in collaboration with Zain titled “Warm Their Hearts." This is an important milestone as it is the first cooperation agreement signed by UNHCR with a telecommunications company in the region. Other organizations that UNHCR Kuwait is currently in contact with are Alghanim Industries and Agility. We have more initiatives on the way with several other private-sector entities under study, and we anticipate the new collaborations to be finalized and announced shortly.

What are your respective expectations and forecasts for Kuwait's future?

HM Kuwait is an easy country to turn around. The country has human capital, decent infrastructure, an excellent location, and many financial resources. Therefore, it will be easy to turn Kuwait around in terms of diversifying its economy and developing the service industries. The vision is great and is moving in the right direction; however, the challenge remains in implementation. Our forecast for Kuwait is that it needs to reform and if this is delayed, the future cost will be exacerbated. We believe there is no choice but to reform; the question is when. If we delay the reform agenda and do not look closely at the fiscal situation, subsidies, wage bills, productivity, efficiency, and the public sector, then the cost later on will be higher both socially and economically.

HH In 2017 protection and humanitarian needs are expected to grow significantly. Given that the refugee crisis continues to be the largest in the region with displaced people reaching the highest record since World War II, the challenge ahead requires us to maximize our efforts in this coming year and work closely with governments and NGOs to continue providing aid for refugees. I also want to emphasize the importance of the role of the private sector in support of the humanitarian work. We will look at ways both in Kuwait and regionally to enhance and strengthen our partnership with the private sector. We look at the resilience component and how we can support the host communities and refugees as well.