Foreign investment in Kuwait reaches 5bn dinars by mid ’23

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KUWAIT CITY, Nov 29: The report of the National Center for Development Research of the General Secretariat of Planning revealed that Kuwait declined in the investment environment pillar during the past decade by 5 places, and its best performance was in the years 2013 and 2023, when it scored 57.3 out of 100, while the volume of foreign investment in Kuwait reached 5 billion dinars by the end of the first half of 2023. The report explained that Kuwait has historically been a financial center and a regional trade hub, and over the past decade it has witnessed stable levels of economic growth, but the recent decline in oil prices and the decline in investment levels portend more economic uncertainty for the country in the coming years while recognizing the obvious importance of direct investment, international data and classifications of foreign investment flows do not give Kuwait advanced positions on the list of countries attractive to investment.

The report on prosperity in Kuwait pointed out that the decline in the pillar of the investment environment in Kuwait was linked to a number of realistic, administrative, legal, and human obstacles represented by the fluctuation of some aspects of economic, financial, and tax policies, in addition to the overlap and intertwining in the legislative base related to the economy, trade and investment and the inadequacy of some of them and delaying their keeping pace with changes. The rapid growth in the global economy, where any trade-off in favor of the national investor at the expense of the foreigner is considered a violation of the legal principles governing foreign direct investment flows in light of the provisions of the relevant bilateral and international agreements, and where the effective protection of invested capital is considered a continuing necessity.

The report confirmed the existence of confusion in some features of economic legislative policy and the delay in approving some laws or canceling some legislative texts for reasons related only to conflicts and contradictory opinions between political forces, in addition to ignorance of the importance of foreign investment to the national economy, with a wrong view of foreign investments flowing into the country as competition to the Kuwaiti private sector and harmful to its interests, as well as the lack of commitment of state ministries to the components of the vision and development plan in implementing government and economic projects. The report pointed to the scarcity of plots of land that can be used for economic and investment projects and the slow launch of privatization projects and partnership projects between the public and private sectors, in addition to the delay in the actual application of governance concepts in the government sector despite their launch in private sector companies.

The report pointed out the slowness of the documentary cycle associated with development projects, the lack of ease of starting work in investment and economic projects, the procedural complexities, and the long period required to obtain licenses and approvals and to recruit qualified workers. The report explained the lack of a detailed and updated procedures guide for company owners that shows the detailed steps required to complete all their transactions in the competent government agencies, in addition to the lack of interest in updating the instructions, forms, and applications on the website to facilitate the interested investor, and the weakness of linking to the automated system used by all ministries and agencies concerned with the investment, and the presence of some problems in the legal aspects and judicial disputes related to foreign direct capital investment, as well as the presence of complications that have become common in most government agencies related to the request for the person to complete the transaction in person and follow the procedures, and the refusal to seek the assistance of the local agent or legal representative in Kuwait.

To overcome these challenges, Kuwait needs to diversify its economy, improve its links to international markets, and focus not only on attracting foreign investments focused on natural resources but also on investments that seek market and efficiency. A country like Kuwait needs basic reforms because it has the necessary leverage and financing in order to benefit from the financial abundance during the previous years to build a strong and diversified economy that is not dependent solely on oil resources, by opening areas of investment to local and foreign investors, creating more job opportunities, and creating a climate Investment in a fair competitive environment that can transform Kuwait into an important financial and economic center in the region.

The following are the obstacles to developing the investment environment in Kuwait
■ Fluctuations in some aspects of economic, financial and tax policies
■ Overlapping and intertwining in the legislative base related to the economy, trade and investment
■ Confusion regarding some features of economic legislative policy and delay in approving some laws
■ Ignorance of the importance of foreign investment to the economy and a mistaken view of its competition with the private sector are harmful to its interests
■ Lack of commitment by state ministries to the components of the vision and development plan in implementing government projects
■ Scarcity of land for economic projects and slow launch of privatization and partnership projects
■ Delay in the actual application of governance concepts in the government sector despite its launch in the private sector
■ The slowness in the documentary cycle associated with development projects and the lack of ease in starting work on projects
■ The lack of a procedures guide for company owners that shows the steps for completing their transactions with government agencies
■ Lack of interest in updating instructions, forms and requests on the website
■ Poor connection to the automated system used by all ministries and entities concerned with investment affairs
■ There are problems in the legal aspects related to foreign direct capital investment
■ There are complications related to requesting the person receiving the transaction to appear in person to carry out the procedures
By Mahmoud Shendi
Al-Seyassah/Arab Times Staff

This news has been read 855 times!