Kuwait seeks to boost its non-oil revenues

Kuwait seeks to boost its non-oil revenues

BRI can accelerate growth in Kuwait

China’s Belt and Road Initiative is highly compatible with Kuwait Vision 2035 and can reduce its reliance on oil exports, says a Kuwaiti economist

April 2019

The China-proposed Belt and Road Initiative (BRI) can help accelerate economic growth in Kuwait and reduce its reliance on oil exports, a Kuwaiti economist has said.

“The initiative will help create more jobs, increase net exports, attract more foreign investments, increase overall gross domestic product,” Abdullah Al-Salloum told Xinhua in a recent interview.

The Belt and Road is highly compatible with Kuwait Vision 2035, he said. “Such a strategy has many advantages.”

Kuwait Vision 2035 is a national development plan designed to introduce a change in Kuwait’s oil-reliant economic structure and transform the oil-rich Gulf state into a trade and financial hub by 2035. The strategic plan involves over 160 projects and invites foreign investment.

“China has the expertise, manpower and industrial and logistic supreme production ingredients, which crave entering a market or creating a new one,” Al-Salloum said. “Kuwait, on the other hand, has a superior location that can be utilised by China to create mutual interests for both countries.”

Al-Salloum: cooperation with China will have a positive impact

Al-Salloum: cooperation with China will have a positive impact

“This cooperation would definitely increase China’s returns on investment,” he said. “For Kuwait, it would increase net exports, foreign investments and the employment rate.”

All these, the Kuwaiti expert added, “would finally be reflected in both countries’ gross domestic product.”

Kuwait’s economy mainly depends on oil exports, which follows a scheme of market sharing and policies, said Al-Salloum, adding that at the same time his country and China share views on the global economy and trade, and support policies based on mutual interests.

Such values are embodied in the bilateral economic and trade cooperation, he noted.

Al-Salloum said he believes cooperation with China will have a positive impact on the social development in Kuwait, as this can lead the country to be more internationally exposed and prompt legislations to facilitate trade and investment.



Meanwhile, Kuwait is planning to create a $10 billion (Dh36.7 billion) fund with China to invest in the two countries, according to people with knowledge of the matter, said a Bloomberg report.

The Gulf state is discussing the creation of a Kuwait-China Silk Road Fund that would invest in Kuwaiti projects related to the Silk City and islands development, according to the people. It could also be used for strategic investments in China and other areas under the Asian country’s One Belt, One Road initiative, the people said, asking not to be identified because the information is private, the report added.

China and Kuwait would each be responsible for raising around $5 billion for the fund, the people said. The Asian country would also work with Chinese strategic partners to arrange debt financing for projects, which could give the fund an investment capacity of as much as $30 billion, they said.

Under the proposal, the fund’s Chinese backers could introduce strategic partners to work on its investment projects as contractors, according to the people. Deliberations about the fund are at an early stage, and details like the size and investment targets could change, the people said.

“Silk City and development of the islands is the signature project in the development plan for New Kuwait 2035,” said Khalid Mahdi, secretary general of Kuwait’s Supreme Council for Planning and Development. “There are three prerequisites for the signature project to be realised: the special economic zone law, a private-sector finance model, and the master plan.” He declined to comment further.

China’s finance ministry, foreign ministry and its top economic-planning body, the National Development and Reform Commission, didn’t immediately reply to fax queries.

Kuwait is developing its northern region as it seeks to boost non-oil revenue and transform itself into a regional business hub by 2035. The multibillion-dollar Silk City project, which has been planned for more than a decade, is part of this goal.

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