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With 6% of the world’s proven oil reserves and 1% of its natural gas, Kuwait had an estimated GDP per capita of $71,943 in power purchasing parity terms in 2017, which was the eighth-highest value for any country or autonomous region, according to the World Bank. Kuwait has also been a prudent saver of its petrodollars and has the world’s fourth-largest sovereign wealth fund, with the Kuwait Investment Authority managing $592bn in assets in mid-2018, according to the SWF Institute. In 2018 the IMF calculated this financial buffer to be equivalent to 470% of Kuwait’s GDP. Although Kuwait is still exposed to oil price fluctuations for now, development initiatives already under way should ensure a sustainable economic growth path in the long term. This chapter contains an interview with Sheikh Meshaal Jaber Al Sabah, Director-General, Kuwait Direct Investment Promotion Agency.

Retail and wholesale trade accounts for a sizeable percentage of Kuwait’s non-oil GDP – at 9.1% as of February 2018 – and there are solid growth forecasts for the coming year. Kuwait has one of the highest per capita incomes in the world at $68,500 in 2017, according to the World Bank, and there is strong demand for luxury and imported goods among wealthy locals and foreign residents, who now make up around 70% of the population. Kuwait’s retail sector saw significant growth in 2017 as new and old players rushed to adapt to changing tastes and demands. Innovative malls and increased competition from e-commerce retailers have started reshaping the local market. These trends are expected to continue into 2019 as stable macroeconomic fundamentals and government infrastructure programmes boost growth and encourage investment.

The energy sector is the backbone of Kuwait’s economy, accounting for 90% of both exports and government revenue. Major projects led by state-owned companies responsible for the extraction, processing and marketing of oil and gas also drive the non-oil economy by supporting tens of thousands of jobs in engineering, construction and support services. Despite the fall in oil prices, progress on these projects and investment in new technology continues. With self-imposed production cuts coming to an end, the strategic intent is to transform Kuwait from a country that primarily pumps and exports crude oil, to one with an integrated energy industry. Goals include optimising oil extraction, realising the full potential of domestic natural gas fields and doubling refining capacity to produce cleaner fuels and increased volumes of feedstock for a more diversified downstream sector. This chapter contains an interview with Nouf Al Abdul Razzaq, General Manager, BP Kuwait.

Hundreds of thousands of construction workers in Kuwait are busy building bridges, roads, homes, the region’s largest refinery, an expanded airport terminal and a new port. These are just some of the major projects being completed as the country works towards the New Kuwait 2035 vision. However, these developments are almost entirely driven by government spending and components of the Kuwait National Development Plan 2015-20, which have been subject to delays and postponements in 2017 and 2018. Despite these setbacks, the remaining two years of the plan should see the completion of major infrastructure improvements that could serve as the catalyst for significant changes within Kuwait’s economic landscape.

The government’s New Kuwait 2035 strategy has signalled ICT development as a key pillar that is expected to attract investment and boost the local economy. In 2016 telecoms accounted for 7.7% of non-oil revenue and 3.92% of total GDP at constant prices, according to the Central Statistical Bureau. Though its contribution to the non-oil sector grew to 8.2% in 2017, its GDP share dipped slightly to 3.86%; however, sector contribution to GDP is regaining momentum, with telecoms accounting for about 5% in the first half of 2018. The sector generated $1.9bn at constant prices by the end of the second quarter of 2018, a year-on-year growth of 34%, and its positive trajectory is expected to continue, backed by the expansion of three international mobile network operators in Kuwait: VIVA, Ooredoo and Zain. This chapter contains an interview with Salman bin Abdulaziz Al Badran, CEO, VIVA Kuwait.

As Kuwait tries to curb its dependency on hydrocarbons, which accounted for over 90% of state revenues in 2017, other industries are coming into focus. Excluding refined petroleum products and nuclear fuel, manufacturing industries’ contribution to GDP rose by 6.2% in 2017 to $5.6bn, according to the central bank. Meanwhile, refined petroleum products and nuclear fuel’s portion of GDP expanded by 18% to $3.3bn in 2017 from $2.8bn the year before. Much of this recent performance is due to implementation of the country’s national development plan, New Kuwait 2035, which prioritises infrastructure upgrades and economic diversification as part of 164 programmes, projects and initiatives that aim to transform the country into a centre of finance and industry. This chapter contains an interview with Faisal Awwad Al Khaldi, Deputy CEO, Kuwait Steel.