EASTERN PROMISES
In light of stagnating oil prices, Kuwait has strengthened its trade ties in the Eastern hemisphere, notably with Malaysia and Japan, to help boost the country's infrastructure sector.
With oil revenues roughly accounting for half of Kuwait's GDP as well as almost 90% of governmental income, the country's key export commodity remains at the forefront of bilateral trade negotiations and agreements in 2016. What has become noticeable over the course of the last year, however, has been Kuwait's strategic focus on refining trade ties with its East Asian and Southeast Asian partners.
This should not come as a surprise, given that South Korea, China, India, and Japan account for more than half of Kuwait's total exports of mainly oil and gas products and fertilizers. And yet, the country's challenging entanglement with “black gold" principally manifested itself in 2016, when Kuwait's Central Statistical Bureau recorded a decrease in balance of trade by 76.2% compared to the first fiscal quarter of 2015. At the same time, Kuwaiti imports of machinery, electrical, and transport equipment, as well as base metals from China, the US, Saudi Arabia, the UAE, and Japan largely remained unaltered. Particularly due to a huge drop in oil exports, however, Kuwait is not only set to launch short-term financial stimuli to help balance the oil prices, but to further ensure that the government's revenues are gradually diverted away from the oil and gas segment. Instead, the 2016/17 economic reform plan encourages investments to be channeled into the country's burgeoning infrastructural projects, the health segment, or the telecommunications industry. Although various authorities, including the likes of the Kuwait Direct Investment Promotion Authority (KDIPA), the Kuwait Authority for Partnership Projects (KAPP), and the Central Tenders Committee (CTC), have facilitated conditions for foreign companies to directly invest into vibrant market segments, MNCs remain primarily involved in public-private partnerships and are hence hindered from obtaining full stakes in lucrative businesses and projects.
Nevertheless, the government's diversification efforts are perhaps best illustrated by how Kuwait invigorates its geopolitical trade ties in the East Asian and Southeast Asian region. Having signed a trade agreement with Malaysia in March 2016, the Kuwaiti government, under the leadership of Prime Minister HH Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah, went on to expand Kuwait's “comprehensive partnership" with Japan in May 2016.
The trade negotiations were predominantly characterized by the PM assuring the facilitation of business and investment conditions for either Malaysian or Japanese companies in Kuwait, such as abolishing the national offset program, all while highlighting Kuwait's commitment to securing a stable supply of oil and gas products in light of a global energy market in the doldrums. Moreover, the PM and his respective delegations invited Malaysian and Japanese companies to become involved in infrastructural megaprojects such as the metro project, the Az-Zour North Independent Water and Power Project, or the integrated solar combined cycle. In fact, Kuwait's five-year development plan (2015-2020) highlights the government's ambition to attract FDI by tendering contracts for nearly 30 infrastructure projects. In this regard, Japanese companies are primarily active in Kuwait's industrial and transport sector, while Malaysian companies have claimed their stakes in the country's electricity and power projects. At the same time, both governmental entities and key industry players such as the country's largest sovereign wealth fund—the Kuwait Investment Authority (KIA), Kuwait Finance House (KFH), and Agility Logistics—have expanded their investment portfolio in Malaysia and Japan. On the other hand, bilateral consortia, such as the Malaysia-Kuwait Business Council (MKBC), as well as the Japan-Kuwait Businessmen Committee (JKBC), have become platforms to maintain a policy dialog and to mutually advance business interests. However, while Japan's trade relationship with Kuwait has been boosted through the annual JKBC since 1995, it was not until 2015 that the MKBC was launched. With the global energy market in crisis, Kuwait corroborated its confidence in the East Asian and South East Asian market, inviting regional corporations to become part of the nation's ambitious plan to swiftly diversify its economy through promising investments into Kuwait.
EASTERN PROMISES
TABLE OF CONTENTS
Guest Speaker
Dato’ Sri Haji Mohammad Najib bin Tun Haji Abdul Razak, Prime Minister , Malaysia
TBY talks to Dato' Sri Haji Mohammad Najib bin Tun Haji Abdul Razak, Prime Minister of Malaysia, on the growing contribution that Islamic countries are making to the global economy and how Islamic financing can offer new opportunities to industry and academia.
read articleInterview
HE Khaled Nasser Abdullah Al-Roudan, Minister, Commerce and Industry (MoCI)
TBY talks to HE Khaled Nasser Abdullah Al-Roudan, Minister of Commerce and Industry (MoCI), on tools and strategies for diversifying the economy, the role of international players in supporting a wider range of sectors, and the rapidly developing food industry.
read articleInterview
HE Yousef Al-Ebraheem, Advisor , Al-Diwan Al-Amiri
TBY talks to HE Yousef Al-Ebraheem, Economic Advisor to the Al-Diwan Al-Amiri, on the need for a rejuvenation of Kuwait's infrastructure to support an economy that has come a long way and the role education will play in delivering the expertise required by the society.
read articleInterview
Dr. Khaled A. Mahdi, Secretary-General , Supreme Council for Planning & Development (GSSCPD)
TBY talks to Dr. Khaled A. Mahdi, Secretary General of the Supreme Council for Planning & Development (GSSCPD), on the breakdown of Kuwait's long-term economic plan, the KPIs that will benchmark its success, and what Vision 2035 means for the nature of the economy.
read articleInterview
Sheikh Dr. Meshaal Jaber Al Ahmed Al Sabah, Director General, Kuwait Direct Investment Promotion Authority (KDIPA)
TBY talks to Sheikh Dr. Meshaal Jaber Al Ahmed Al Sabah, Director General of the Kuwait Direct Investment Promotion Authority (KDIPA), on launching an investment promotion conference, attracting the right partners for PPP, and expectations for the year ahead.
read articleInterview
HE Dr. Mohammad M. Al-Zuhair, Executive Chairman, Kuwait National Fund for Small and Medium Enterprise Development
TBY talks to HE Dr. Mohammad M. Al-Zuhair, Executive Chairman of the Kuwait National Fund for Small and Medium Enterprise Development, on empowering young Kuwaitis, IT and entrepreneurialism, and the growth of fintech.
read articleFocus: Still all in the family?
Merchant families in Kuwait
Family-owned businesses play a major role in the Kuwaiti economy. However, with many approaching the third generation of management, they are starting to come across unique problems that may pose issues for the greater economy.
read articleInterview
HE Sheikh Abdullah Ahmad Al-Humoud Al-Sabah, Director, Environmental Public Authority (EPA)
TBY talks to HE Sheikh Abdullah Ahmad Al-Humoud Al-Sabah, Director of Environmental Public Authority (EPA), on how oil companies can contribute to Kuwait's vision on sustainability and the various projects that are coming to fruition.
read articleInterview
Dr. Samira S. Omar Asem, Director General, Kuwait Institute for Scientific Research (KISR)
TBY talks to Dr. Samira S. Omar Asem, Director General of the Kuwait Institute for Scientific Research (KISR), on commercializing the green innovations coming from R&D initiatives, the role of collaboration across multiple sectors, and projects that we should expect to see more of in the future.
read articleInterview
Khaled Abdulrazzaq Al Khaled, Vice-Chairman and CEO, Boursa Kuwait Company
TBY talks to Khaled Abdulrazzaq Al Khaled, Vice-Chairman and CEO of Boursa Kuwait Company, on the takeover of the Kuwait Stock Exchange and the role the bourse plays in both the privatization of government entities and as a source of capital for family businesses.
read articleInterview
HE Essam Abdul Mohsen Al-Marzouq, Minister, Oil & Minister of Electricity and Water
TBY talks to HE Essam Abdul Mohsen Al-Marzouq, Minister of Oil & Minister of Electricity and Water, on cooperation with other ministries, the private sector's role in energy, and upcoming regulations.
read articleInterview
Ghalib Shlash Safouq, Assistant Undersecretary for the Construction Projects Sector, Ministry of Public Works
TBY talks to Ghalib Shlash Safouq, Assistant Undersecretary for the Construction Projects Sector at the Ministry of Public Works, on Kuwaiti companies, the country's healthcare facilities, and the role of international companies.
read articleInterview
Khaled K. Al Mashaan, Vice-Chairman & CEO, ALARGAN International Real Estate Company
TBY talks to Khaled K. Al Mashaan, Vice-Chairman & CEO of ALARGAN International Real Estate Company, on drivers of growth, operating throughout the region, and real estate prices in Kuwait.
read articleInterview
Tawfiq Ahmed Bin Sultan, Chairman, Middle East Telecommunications Company (METCO)
TBY talks to Tawfiq Ahmed Bin Sultan, Chairman of the Middle East Telecommunications Company (METCO), on e-government potential, the future of the economy, and the state of technology uptake in Kuwait.
read articleInterview
Sheikh Yousef Abdullah Sabah Al-Nasser Al-Sabah, Director General, Kuwait Ports Authority (KPA)
TBY talks to Sheikh Yousef Abdullah Sabah Al-Nasser Al-Sabah, Director General of Kuwait Ports Authority (KPA), on his operational plans for the near future and turning Kuwait into a regional logistics hub.
read articleInterview
HE Khaled Nasser Abdullah Al-Roudan, Acting Minister, State for Youth Affairs
TBY talks to HE Khaled Nasser Abdullah Al-Roudan, Acting Minister of State for Youth Affairs, on e-platforms and blended learning programs, developing ICT skills, and preparing young people for tomorrow.
read articleInterview
Eng. Ali Hussein Al Youha, Secretary-General, National Council for Culture, Arts and Letters
TBY talks to Eng. Ali Hussein Al Youha, Secretary-General of the National Council for Culture, Arts and Letters, on the activities of the Council and works to preserve and enhance Kuwait's cultural heritage.
read article