Looking beyond the black gold

Oil-rich Kuwait, sitting on top of about nine per cent of the world’s reserves, is looking to sharpen its entrepreneurial edge in the global economy. The country, which has a long history in trading, fishing and agriculture, is now looking beyond hydrocarbons, which accounts for 40 per cent of its GDP, to information technology, industry and services.
Despite any short-term uncertainty over the fate of its Iraqi neighbour, there is a long-term programme to move the economy away from dependence on oil to create a more stable platform for growth. The government plans sweeping changes to prepare for full membership of the World Trade Organisation in the next few years.

The country has already made significant progress. There is greater depth to the industrial sector, including the beginnings of a petrochemicals industry, and a shift towards private business, traditionally less financially rewarding than the public sector.

On the political front, much has changed in the last decade. The country now boasts one of the Gulf’s most vibrant democracies, a considerable achievement in such a conservative region, and women’s rights have moved up the agenda.

Liberalisation of the economy has led to a number of privatisations, strengthening the local stock market, while foreign investment is on the increase. The government is keen to attract interest not only in the oil sector, through “Project Kuwait”, a £4 billion plan to tap the country’s northern oil fields, but also in value-added areas such as IT, agricultural exports and petrochemicals initiatives.

Investment laws have been tweaked to entice more foreign expertise and investment into infrastructure development, specifically in the power sector and water desalination.
Kuwait, which gained independence from Britain in 1961, still maintains strong links with London. In the financial sector, it manages an overseas portfolio of assets worth an estimated £55 billion, much of it through the City of London.

In the 40 years since independence, the country has evolved into a modern state, with a first-class infrastructure and a skilled workforce. And, despite some reservations from more traditional elements, there is a real commitment at the top to open up the economy and create a sustainable basis for further development.

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