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Thursday , October 29 2020

Kuwait among emerging markets but some negativity seen

KUWAIT CITY, May 19: A report published by the ‘Global Finance’ magazine ranks Kuwait among the regions for emerging markets that enjoy investment opportunities, but they face some negativities.

The magazine’s report confirmed the strength of the Kuwaiti banking sector for incentives for foreign direct investment, but the report pointed out that the negatives lie in the heavy dependence on the oil sector, in addition to the presence of a huge and inefficient public sector, which lacks transparency.

This classification was based on the aggregation of a number of data, including growth forecasts for the current year, as the country is likely to witness a contraction of 1.1 percent, in addition to the percentage of change in foreign direct investment during 2018/2017 in which Kuwait recorded a decline of about 1 percent.

This is in addition to the country’s ranking in the Global Competitiveness Index, the Corruption Perceptions Index for 2019, and the Ease of Doing Business Index for the current year. Despite the expectations issued by the International Monetary Fund a few months ago, which indicate a positive growth in per capita income in 2020 for more than 160 member countries, the report pointed out that these expectations run contrary to the Fund’s expectations that it will witness negative growth in per capita income in more than 170 countries, with low-income countries especially at risk.

According to the report, it may seem almost inappropriate to celebrate the power and achievements of many emerging countries in the world in the midst of one of the worst crises in modern history, indicating that the commercial clashes and global geopolitical tensions that were the hallmark of the past year seem almost trivial now, compared to the frightening epidemic caused by the spread of coronavirus.

However, the report pointed out that the experts agree at the present time that these conflicts, along with the deterioration of confidence, made us weak and unable to provide a coordinated response, pointing out that the current circumstances remind us of the extent of dependence on each other.

On the other hand, the report pointed out that despite the epidemiological setback, emerging economies are preaching the greatest amount of new growth, indicating at the same time that it will also be inaccurate to look back and into the future and see adversity only, rather than the determination and flexibility that these enormous challenges. The report pointed out that despite all the experiences and difficulties, the emerging markets have never stopped on their path to sustainable development and prosperity.

The report noted that in the face of one threat after another, the governments of these countries often intervened more quickly and firmly than their more developed counterparts to protect their hard-earned gains, which confirms that these efforts were not in vain. From a more optimistic point of view, the report indicated that the recession will be short-lived for emerging markets, and after this painful interruption, the start button will be pressed again to return life to normal.

On the other hand, others reject this explanation and insist that the recovery will take years. In both cases, the report stated that most developing countries are today stronger, richer, and more competitive than ever before, and are in a better position to withstand and recover from a crisis of this magnitude.

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