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Friday , September 29 2023

O leadership … read the reasons for the private sector’s capital migration

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WHEN you look at the size of the Kuwaiti private sector’s investments in other countries, you will undoubtedly be dazzled by the figures that are all distributed to about 44 countries.

In this regard, if Kuwait’s laws and regulations allowed the use of one-tenth of its foreign investments, Kuwait would be an investment paradise, and would be transformed into an industrial, service, and even agricultural workshop. It would also outperform its neighbors in the region in relation to its strategic location, and in fact even become a link between the East and the West.

However, the reality on the ground begs to differ. In other words, Kuwait is blessed with great wealth and creative minds, but it lives in poverty and deprivation, due to which capital migrates abroad.

To confirm this, there are statistics that reveal the extent of the inability to bring Kuwaiti capital into the country.

Kuwaitis invest about 35 billion riyals in Saudi Arabia, more than 205 billion dirhams (or the equivalent of USD 55 billion) in the UAE, and USD 9.6 billion in Bahrain.

In the United States, the figure is almost USD 380 billion (according to a statement by former US Secretary of State Mike Pompeo), and in France, it is USD 6 billion.

In the United Kingdom, it amounts to GBP 50 billion, in Canada CAD 2.3 billion, and in Germany, it amounts to USD 21.65 billion.

These are just some figures about the volume of Kuwaiti foreign investments in some countries, and leads us to ask – Why do Kuwaiti funds migrate abroad?

Here we refer to a study conducted years ago, the conclusion of which was that Kuwait “is an environment that is repellent to both locals and foreigners. In the year 2009, the volume of foreign investments was zero. On the other hand, many countries took advantage of the financial crisis in 2008 to turn into a paradise that attracts capital from abroad due to the laws and regulations which prevent any initiative. But in Kuwait, the concerned agencies devoted themselves to secondary conflict and polemics, especially between the legislative and executive branches.”

No one looked at the reality of the erosion of the economic movement, which appeared in its clearest form during the COVID-19 pandemic when all institutions were unable to meet the daily needs of citizens. Perhaps the simplest secondary matters are an indication of this such as when the country suffered from an onion crisis!

The size of the deficit was revealed after the pandemic when the owners of small and medium enterprises were forced to close their businesses under the weight of the inability to meet the financial requirements, while the government stood by and watched.

While some of them resorted to migrate to neighboring countries, especially the Gulf countries, which provided them with all the reasons for success, some others are still in prison today because of their inability to pay their debts.

Today, instead of benefiting from the global crisis due to the Russian-Ukrainian war, which some Gulf countries exploited to boost their economic movement, Kuwait appeared in a backward image.

Either it worked to revive outdated laws that were issued 50 years ago under circumstances that were different from the current reality, or it tightened the applicable regulations and even made them an opportunity for exploits by influential people in some institutions.

For instance, someone puts together a feasibility study for a factory or project. It gets rejected by the specialized authority. After a while, you find the same project being implemented by someone, after the feasibility study was leaked to him.

What does all this mean?

There is no doubt that the inability to modernize and develop laws in line with the economic and financial developments in the world leads to negligence in the economy, and striving to make it besieged and unable to move and innovate.

All of this is taking place under the eyes of specialized authorities that divert their view from reality, as they do not listen to advice and opinions.

It seems as if these authorities suffer from deafness, dumbness, and short-sightedness, while Kuwaiti investments and capitals continue to leak abroad due to the existence of those who are convinced that “money that is not in your pocket doesn’t concern you.”

By Ahmed Al-Jarallah

Editor-in-Chief, the Arab Times