(MENAFN - Arab Times) KUWAIT CITY, Jan 30, (KUNA): Kuwait government has been carrying out a multi-faceted plan for four years now to address budget deficit and diversifying national income, against the backdrop of low oil prices. Drop in oil prices since mid-2014 created a critical economic and financial reality, which aroused serious questions about post-oil income and sectors that could be a source of national income.
The government, in a bid to tackle financial challenges, issued international bonds worth $8 billion last March. This issue was coupled by domestic treasury bonds which increased overall bonds issue to KD 13.3 billion ($44.2 billion) in 2017, against $32.5 billion the year before. The 2016-17 budget suffered around $29.5 billion defi- cit, and Finance Ministry put the 2017-18 deficit at $21.6 billion.
The Finance and Economy Committee at the National Assembly approved, beginning of this year, a bill that allowed the government to raise debt ceiling to KD 25 billion ($83 billion) and extended lending period to 30 years. Kuwait also started financial and economic reforms, aimed at boosting role of private sector in development, diversifying income, increasing non-oil revenues, cut public spending and improving government performance.
The government is pushing for a solid partnership with the private sector (PPP) to achieve economic and financial sustainability. There were, however, some positive signs despite the tough economic and financial conditions. Kuwait stock exchange was classified by the FTSE Russel last year as one of the promising markets.
The PPP was fruitful via the operation of Zour power station. Kuwait also attracted international technology companies to work in the country. Kuwait development plans specified the promising economic sectors to diversify income, including logistics, financial services, tourism, industry, petrochemicals, exports and re-exports, said Dr Khaled Mahdi, Secretary General of the Supreme Council for Planning and Development.
Speaking to KUNA, Mahdi said the financial sector has great burden to diversify the economy, while services needed knowledge-based economic tools in addition to the small and medium-size enterprizes. Mahdi said diversifying income relied on a major element, talented human resources.
The youth in Kuwait are talented by nature and have 'excellent minds and sophisticated tools coping with the fourth industrial revolution,' said Mahdi, which enabled them to have a commercial state of mind. Dr Abdulaziz Al-Turki, an expert in administration, planning and development, said people with bright ideas were transforming their ideas into profits and capitals. Speaking to KUNA, Al-Turki said creativity and the creative people 'are our genuine wealth and our human capital … They are the pillars of sustainable development and key to production and economic diversification.' He called for appointing those talented youth into managerial positions and to consult them during the planning phase, in order to benefit from their creativities to the development of curricula and improving environment work. Abdullah Al-Ajmi, CEO of K-Net automated financial services company, said financial services have a major role in diversifying income. He said Kuwaiti youth excelled in ecommerce in recent years, and many of them expanded their businesses to the Gulf and internationally.
By Fawaz Karami
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