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Wednesday , October 21 2020

Debate on whether Kuwait stays ideal destination for foreign workers

‘Use expat investments to boost economic cycle’

KUWAIT CITY, March 4: Almost two decades ago, Kuwait was an ideal destination for many foreign workers, particularly those holding high positions in both the public and private sectors, reports Al-Rai daily quoting sources. Kuwait attracted not only those who came to work in the country but also investors with savings plans in various forms, primarily bank deposits.

However, the current indicators reflect many changes in the local economic environment due to several factors, led by the drop in oil prices and huge budget deficits in succession and an increase in fees which left some wondering “Has the landscape really changed, and is Kuwait still on the map of savings and investment as it was before? One of the senior bankers answers these questions by quoting the story of one of his old friends from Kuwait, explaining that it applies to a segment that is not simple.

“I have a Lebanese friend who, 14 years ago, after the assassination of former Lebanese prime minister Rafik Hariri, persuaded his family to establish an investment portfolio that would raise their capital from members of his family. “At the time my friend decided to invest the portfolio capital in Kuwait. As he worked for a local institution and his proximity to the business community, it was prudent to bring his family’s savings into a stable, economic and political country with optimistic indicators, not least the growth of the economy.

“But the irony is that my friend, the Lebanese himself, has recently begun reviewing his plans and his family to keep their money in Kuwait, or move it out, but he has not yet decided on the destination.” “Until 2008, Kuwaiti companies were not suffering from structural crises in their budgets.

Prior to that, most of them would have intersected, if not all, on the desire to expand internally and externally, supported by optimistic plans, which stimulated the fl ow of profits into shareholders pockets,” says one veteran economist.

“With or without it, a majority of local companies have been hit by a major financial crisis and even the weighty names have been weakened. It is no secret to say that the difficult financial situation of many companies affected their investment plans.” He pointed out that “away from the investment decisions that some have described as a disaster, and that deepened the scars of the crisis, the domestic market is facing difficult economic challenges, starting with the accumulated market losses, therefore some companies lost their capital, credit lines with higher risks of exposure to defaults, which prompted banks to continue to apply the policy of reserving provisions against non-regular loans for more than 10 years.”

“In practice, the crisis of local companies has not been the only reason to weaken the appetite of foreign investors to pump more money, whether by companies or individual residents, the language of rhetoric to attract foreign funds declined, in contrast to the rising voices of denunciation of expatriates until it reached the description that some have become a burden and need to be eliminated quickly, without discrimination between workers and others that offer added value both in terms of their job role and by investing their savings and ideas that benefit everyone.

“ Abdullah Najeeb Al Mullah, a member of the Chamber of Commerce and Industry said in the UAE the ratio of population is in favor of the expatriates 5:1 and the decisions are motivating their survival not their migration.

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