ENABLING PROGRESS

Kuwait 2018 | ECONOMY | INTERVIEW

TBY talks to Dr. Khaled A. Mahdi, Secretary General of the Supreme Council for Planning and Development, on progress in Kuwait's National Development Plan, investing in human capital, and supporting SMEs.

 Dr. Khaled A. Mahdi
BIOGRAPHY
Secretary General

What have been the main developments in the execution of the Kuwait National Development Plan in the past year?

The Kuwait National Development Plan (KNDP) is progressing well, and the government has passed important laws that are critical for the enabling of the economy. Many strategic projects had been signed and are currently in process. Public-private partnership (PPP) projects have been initiated already and are making headways. Compared to previous years, we see great progress in the major projects, mainly in the areas of logistics, healthcare, and higher education. Kuwait University had great progress in 2017 and expects further improvements in the coming year. We also forecast that 2018 will be an exciting year as we will see the completion and opening of long-awaited strategic projects, mainly the Jaber Causeway and the Ahmad Jaber Hospital. We will also witness further progress of the new Terminal 2 project at Kuwait International Airport. The Jaber Causeway, which is currently 80% complete, is a cornerstone project of major significance, though our most vital project at the moment is perhaps the education reform that was initiated in September 2017 and is led by the Ministry of Education with support in the form of technical assistance from the World Bank. For the oil sector, a key development is the establishment of the Kuwait Integrated Petroleum Industries Company (KIPIC), which will bring horizontal integration to the sector. KIPIC is in the process of completing the front-end engineering design and moving toward the implementation and extraction phase. Together with other projects in the oil sector, this will further enhance the diversification of the economy of Kuwait. We will move toward a larger petrochemical industry and cleaner fuel. Our Shagaya Renewable Energy Park will achieve His Highness the Amir's vision to have an energy mix that consists of 15% renewable energy by 2030. The potential for solar energy generation is huge in Kuwait; we are blessed with a geographically advantageous position, natural resources, and human capital.

How will New Kuwait contribute to the development of human capital?

Education reform, labor market reform, alignment of education and the labor market, and the social safety network—together these form the components of broader reform of the national labor market. They should not happen sequentially but in parallel. The aforementioned education reform pays careful attention to the alignment of education and the labor market. Another important element is empowering Kuwaitis to seek jobs in the private sector and become less dependent on the government for employment, and consequently, the country has initiated many enablers. One of these is the National Fund for SME Development, which has a budget of USD6.6 billion to promote entrepreneurship and SMEs. Another enabler is to attract FDI and attach certain conditions to hire locals. A third enabler is the creation of PPP projects, which will shift the labor market more toward the private sector. Our aim is to reduce the size of the public sector and allow the private sector to grow by 2035. The vision of His Highness is for the private sector to lead the economy, with the government having a regulatory and oversight role.

How do you expect Kuwait's National Fund for SME Development to create the right environment for entrepreneurs?

The key concept that the SME Development Fund focuses on currently is incubation, which is a change of strategy. Before, we used to focus on the project, whereas now we focus on the people. When focusing on the project and its feasibility, one might find extraordinary talent working on a rather humble project. Then again, one might find a great idea that is not led by the right entrepreneur, and this is solved by incubation. That is why the SME Development Fund licenses incubators and leaves the private sector to run them, which will create the right ecosystem for entrepreneurs.