INSTABILITY REMAINS

Kuwait 2017 | INDUSTRY | COLUMN

TBY talks to Saleh A. Al-Babtain, Group CEO, Al-Babtain Group, on the sector.

Saleh A. Al-Babtain

How would you describe your current international investments in light of geopolitical turmoil?

We are mainly involved in Egypt and, to a lesser extent, the Gulf. Across the region, instability remains a challenge, as the GCC is trying too much to be one unit but both oil dependency and Saudi hegemony have the risk of eroding GCC unity. Kuwait actually has no budget deficit, but rather, it is an artificial deficit based on oil prices. The whole GCC is like the sea and when there is a high tide, all the rocks are covered. In addition to political instability across the region, there are also major structural deficiencies, either politically, financially, or socially. What was promised as help from the GCC is not coming. If the government increases fuel prices and brings subsidies to the minimum, then priorities will change. All the investment needs will be adjusted to the situation, but we still believe that we have a big reserve. The world needs this oil and it is still there. The problem is that people are used to cheap services. You cannot come and raise prices instantly, but you have to change the mentality of the people.