Kuwait
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Major Infrastructure Projects Stimulating Economic Expansion
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| Kuwait, the only democracy in the Gulf region, achieved GDP growth of an average 8.5% in 2003 and 2004 to reach US $48.5 billion, while increasing per capita income by 34.5% and keeping inflation to 2.3% and unemployment to 3.5%. While this oil-rich country’s economy is still dominated by the petroleum sector, Kuwait’s non-oil sectors are expanding rapidly as well. |
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Prime Minister
HH Sheikh Sabah
Al-Ahmad Al-Jabar Al-Sabah
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To further stimulate economic growth in the long term, the government has budgeted US $51 billion for new projects that will strengthen Kuwait’s role as a trading and commercial hub for the Gulf region. Badr Al-Humaidi, Minister of Public Works, explains that planned projects to be completed by 2010 include four new cities, a causeway across the Gulf linked to a major highway, upgraded ring roads around the capital, an updated sewage treatment system, and a new US $3.4 billion port on Boubyan Island, complete with a free-trade zone. The port, to be operational by 2009, is expected to handle up to 20 million containers per year. "Kuwait will become a commercial hub in the Gulf region,” Al-Humaidi says.
Other projects being considered or in the works include a subway system for Kuwait City and a monorail system to connect the city center with outlying areas, major tourism projects on Boubyan and Failaka islands (to be developed through build-operate-transfer initiatives), a key south-north highway from Nuwaiseeb to Abdali on the Iraq border, and rail links to Saudi Arabia, Bahrain, Qatar, Oman and the United Arab Emirates. Opportunities for US investors abound as these ambitious projects get underway.
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In fact, investors will find many attractive possibilities in both the oil and non-oil sectors. The Kuwaiti constitution forbids foreign ownership of Kuwait's mineral resources, but the government is currently working to facilitate foreign investment in upstream activities as part of its Project Kuwait initiative. Suppliers of oil-sector equipment and services will also find a ready market in Kuwait. The Foreign Investment Law allows foreigners to own up to 100% of Kuwaiti companies in certain sectors, and the Foreign Direct Investment Act (2001) has eased restrictions on foreign banks and provides long-term protection for foreign investors.
The government has been working to liberalize and diversify Kuwait’s economy still further and to foster the expansion of the private sector. A major privatization program for non-oil-sector activities represents attractive opportunities for international investors, particularly concerning build-operate-transfer projects in the power, wastewater, real estate, health care and transport sectors, among others. |
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