FROM URBAN SPRAWL TO URBAN CRAWL
Limited land and high development costs are limiting Kuwait's economic development, but new measures to better integrate transport and real estate expansion provide a little more wiggle room.
Land development in most of the Gulf has always come cheap thanks to the abundance of low-value, unused land around the cities. Most cities have a virtually never-ending desert to sprawl; but, Kuwait's geography leaves little room for Kuwait City's expansion. As the Kuwait City urban area grows and the traffic problems worsen, land prices in the center of the city have skyrocketed due to demographic growth and increased economic activity—likely to accelerate and further create issues of land accessibility. On average, land value accounts for an average of 20-30% of development costs in the construction sector in the broader GCC; in Kuwait City, this figure reaches 50-60%. The exploding price of land causes many problems for Kuwait, most notably a housing shortage. In the past, limited land space was overcome through suburban horizontal expansion, somewhat controlling land costs in the short term and creating dire traffic and transport infrastructure issues in the long term. The ripple effects on overall economic activities become apparent, as many industries require more space, for things such as factories, to be near the transportation hubs such as the port. Horizontal expansion not only makes the production less competitive, but also worsens the traffic issues.
Moreover, informal land zoning and government ownership complicate accessibility and effective use of land. Informal zoning makes it difficult to obtain well-placed land for factories and other industrial uses. Also, the state owns 95% of land in Kuwait, thus parceling plots is controlled by the government.
Kuwait's land challenges have no singular solution; rather a combination of transportation infrastructure projects and demographic shifts in housing preferences can better address the burgeoning need for housing and industrial space.
The government has announced it will be building 1.2 million housing units over the next decade to fulfill its legal obligation to supply affordable housing. With more than half the population under the age of 25, the demand will likely continue to outpace supply. But fortunately, young Kuwaitis are more willing than older generations to buy apartments in pre-built towers as opposed to expensive and expansive villas. Vertical construction will be an opportunity for private sector construction companies given this demographic shift.
FROM URBAN SPRAWL TO URBAN CRAWL
TABLE OF CONTENTS
Guest Speaker
Mevlüt Çavuşoğlu,, Minister of Foreign Affairs, Republic of Turkey
TBY talks to Mevlüt Çavuşoğlu, Minister of Foreign Affairs of the Republic of Turkey, on further developing relations in a variety of fields, strengthening economic cooperation with Kuwait, and working together on the refugee crisis.
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 Kuwait Direct Investment Promotion Authority (KDIPA), on progress thus far, as well as continuing efforts for the year ahead.
read articleInterview
Dr. Khaled A. Mahdi, Secretary General , Supreme Council for Planning and Development
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.
read articleFocus: New Kuwait 2035 Development Plan
Potential for Revolution
The "New Kuwait" 2035 Development Plan was announced in January 2017 with the goal of revolutionizing Kuwait's economy in the next 20 years, diversifying it and making it competitive on the world stage. But revolutions do not come easy.
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Abdullah Hamad Al-Jouan, Chairman & President, The National Fund for Small & Medium Enterprise Development (National Fund)
TBY talks to Abdullah Hamad Al-Jouan, Chairman & President of The National Fund for Small & Medium Enterprise Development (National Fund), on increasing support for SMEs, technology overhaul, and sectors with potential.
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Dr. Osamah A. Alsayegh, Executive Director , Energy and Building Research Center (EBRC)
TBY talks to Dr. Osamah A. Alsayegh, Executive Director of the Energy and Building Research Center (EBRC), Kuwait Institute for Scientific Research (KISR), on increasing renewable energy generation capacity, improving energy security, and striving to align KISR with national development plans.
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Bakheet Al-Rashid, former President & CEO , Kuwait Petroleum International (KPI)
TBY talks to Bakheet Al-Rashidi, former President & CEO of Kuwait Petroleum International (KPI), on the company's successful operations in the past year, its investment plans, and opportunities in the sector.
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Ibrahim Al-Musaiteer, Deputy CEO, Administration and Finance at Petrochemical Industries Company (PIC)
TBY talks to Ibrahim Al-Musaiteer, Deputy CEO of Administration and Finance at Petrochemical Industries Company (PIC), on its contributions to add value to Kuwait's hydrocarbons.
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Qusai Al Shatti, Deputy Director General, Central Agency for Information Technology (CAIT)
TBY talks to Qusai Al Shatti, Deputy Director General of the Central Agency for Information Technology (CAIT), on implementing e-government initiatives, measuring progress, maintaining security.
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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 the Kuwait Ports Authority (KPA), on the Kuwait Logistics City Project, plans to increase capacity, and digitalization.
read articleFocus: Healthcare Costs
The Costs of Living
Kuwait's health infrastructure and workforce is relatively small, while major health problems have arisen over the past decades. The state is still the dominant force in health expenditure, but private-sector participation is the key to expanding the healthcare sector.
read articleInterview
Ahmad Yousef Al Kandari, Vice Chairman & CEO , United Facilities Management (UFM)
TBY talks to Ahmad Yousef Al Kandari, Vice Chairman & CEO of United Facilities Management (UFM), on weathering the storm, freeing up client potential, and laying the groundwork for successful organizational structure.
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Ali Hussein Al-Yoha, Secretary General, National Council for Culture, Arts, and Letters (NCCAL)
TBY talks to Ali Hussein Al-Yoha, Secretary General of National Council for Culture, Arts, and Letters (NCCAL), on protecting Kuwaiti folklore, encouraging investment in cultural tourism, and bringing the benefits of culture to every Kuwaiti's doorstep.
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Rana A. Al Nibari, General Manager, The Scientific Center Kuwait (TSCK)
TBY talks to Rana A. Al Nibari, General Manager of The Scientific Center Kuwait (TSCK), on rousing people's curiosity for science and technology, connecting with students and their families, and encouraging sustainability.
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