Private sector expected to play bigger role in Kuwait economy

KUWAIT CITY, May 10: The number of companies in the private sector reached 181,134 by the end of 2025, while 25,926 companies remain under review and 7,289 companies hold expired licenses, according to the latest statistics issued by the Public Authority for Civil Information (PACI). The newspaper obtained a copy of the PACI statistics, showing that the number of Kuwaitis employed in the private sector reached 67,224 by the end of December, compared to 395,385 in the public sector. Finance Minister Dr. Yaqoub Al- Rifai said the government is relying on the private sector to help diversify sources of income in view of the continuous State budget deficits. The private sector is also expected to contribute to addressing employment issues.

This raises the question of whether diversifying income sources requires a competent and productive private sector capable of adding real value to the national economy and increasing gross domestic product (GDP). When economic experts were asked about the extent to which the private sector is prepared to play a central role in the plan of the government, as well as the most difficult challenges and obstacles it faces, they said “government agencies must activate this sector and enable it to boost non-oil revenues.” Economist Bader Al-Arbash stressed that the approach of the Ministry of Finance toward stimulating the private sector and enabling it to contribute to diversifying income sources entails first addressing all obstacles to its growth. He said foremost among these is eliminating bureaucracy by simplifying procedures related to obtaining commercial and industrial licenses. He also emphasized the need to expand import and export opportunities for the private sector and eliminate monopolistic practices in the importation of goods. He called for attracting foreign and Arab tourists to the country to revitalize the private sector. He argued that the small population of Kuwait does not encourage the sector to expand its local activities, pointing out that limited population growth led to the stagnation of shopping centers due to low commercial activity. He asserted that overcoming this challenge is possible through the development of domestic tourism, which he described as a “magic wand.”

He explained that revitalizing tourist facilities and public parks throughout the country will push the private sector toward greater expansion and growth. He added that if tourism expansion is achieved through simplified entry procedures governed by clear regulations, the local private sector could emerge from its current stagnation through increased consumer spending. He believes such growth will also encourage the opening of more hotels, resorts and entertainment facilities. He stressed that tourism growth will lead to an increase in food processing plants and other manufacturing industries. “It will also encourage the private sector to establish factories producing gas stoves, chairs and other restaurant supplies,” he elaborated. He went on to say that diversifying income sources necessitates easing access to industrial plots for serious small, medium, and large industrial enterprises, in addition to providing marketing support to the private sector. Agricultural and food security expert Mohammad Al-Furaih called for expanding private sector activities, particularly through diverse investment projects, to contribute to diversifying State revenues. He affirmed the vital role of the sector in addressing employment issues and reducing disguised unemployment, especially in light of the need to increase budget revenues and boost the economic contribution of the private sector to reduce employment burdens on the State budget. He acknowledged shortcomings in private companies, including weak initiative, limited production expansion, and several other issues resulting from insufficient government cooperation with the sector. He indicated that the agricultural marketing sector continues to suffer from disorder and inefficiency, depriving farmers of fair compensation for their produce.

He proposed establishing a unified center for receiving, sorting, packaging, and distributing produce in order to eliminate intermediaries. He stressed the importance of supporting livestock and poultry production projects by increasing feed subsidies within the budget of the Public Authority for Agricultural Affairs and Fish Resources (PAAAFR) to meet the needs of breeders and prevent increasing the prices of sheep, cattle, milk and dairy products. He also expressed surprise over the high price of corn and called for allowing the private sector to establish feed mills at northern and southern ports, including Shuaiba Port and Mubarak Port, with a production capacity of not less than 100 tons per hour and storage facilities capable of holding raw materials for at least four months.

Economist Ahmed Al-Khashnam underscored the need to revitalize the private sector to help reduce the State budget deficit amid declining oil revenues. He pointed out that the sector has the capacity to address employment challenges that the university and high school graduates are facing, thereby, easing pressure on the first chapter of the State budget. He confirmed the availability of expertise and financial liquidity within the private sector, in addition to its culture of initiative, risk-taking, innovation and creativity. On the role of the government in stimulating the private sector, he stressed the need to create an investment environment that encourages growth, modernize economic and commercial legislation, and provide the private sector with the information needed to support decision making. He confirmed the importance of accelerating import and export activities without administrative obstacles and facilitating access to industrial land to encourage industrialists to expand their projects. He added that strengthening partnership between the public and private sectors will contribute more effectively to the State budget.

By Najeh Bilal Al-Seyassah/Arab Times Staff