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The Kuwait Stock Exchange (KSE) is one of the oldest in the region and traditionally has been a regional leader in sovereign bond issuance. Following the economic downturn that started in 2008, the KSE has sought to restore confidence and offer a route to renewed growth via a comprehensive package of reforms. The Capital Markets Law, passed in 2010, aims to boost transparency and enhance investor knowledge regarding participation on the bourse. While these measures may depress trading in the short term, better regulation will provide the basis for long-term expansion. This chapter includes an interview with Ziad Hasan Al Qaissi, Executive Vice-President, Investment Advisory and Research Division, KAMCO. It also features a roundtable with Hisham A Al Razzuqi, CEO, Gulf Investment Corporation; Ali Ahmed Al Zubaid, Deputy Chairman and MD, Alimtiaz Investment; and Maha K Al Ghunaim, Chairperson and MD, Global Investment House.

Kuwait’s economy is famously based on its natural resources, including 8.2% of the world’s oil reserves and around 1% of global gas reserves. The economy is therefore inextricably linked to the price of oil and will remain so for the medium term at least. However, in recent times oil revenues have surged, and together with strong public finances and a young and growing population, the country’s GDP rose 5.7% in 2011. The non-oil economy accounted for 55% of GDP in 2009, a figure the government seeks to increase to reduce dependence on hydrocarbons. Going forward, another key government target is the growth of the private sector’s contribution to the economy, with some $133bn worth of infrastructure projects over the next decade – as part of the National Development Plan (NDP) – to be implemented by public-private schemes. Moreover, 80% of NDP projects are slated for non-hydrocarbons industries. This chapter includes interviews with Minister of Finance Mustafa Al Shamali; Abdalla Salem El Badri, Secretary-General, OPEC; Faisal Hamad Al Ayyar, Vice-Chairman, Kuwait Projects Company (KIPCO); and Moritz Kraemer, Managing Director and Head of EMEA Sovereign Ratings, Standard & Poor’s.

The banking sector continues to follow conservative lending policies as it returns to pre-downturn strength. Thanks to the adroit response of both the government and the central bank, however, the sector is emerging from a challenging period, ready to grow with the wider economy once again. Indeed, limited competition from foreign banks has helped establish Kuwait’s domestic banking system as one of the most robust in the MENA region. The government’s 2010-14 plan is aimed at reviving the economy and overcoming recessionary pressures. The Financial Stability Law, ratified in May 2009, aims to shore up banks, productive sectors and investment companies, and the Central Bank of Kuwait is taking wide-ranging action to help revive banks’ willingness to lend.

Kuwait is widely regarded as a leader of Arab democracy within the Gulf region and a forerunner of political reform in a conservative neighbourhood. Recent years have seen a great deal of progress: in 2005 a law was passed giving women the right to vote and run in elections for the national assembly. Political participation is high, with the 2009 elections seeing a voter turnout of around 60%. Important political, social and economic issues remain unresolved, however. Kuwait is still divided on the issue of gender segregation in universities, for example. Relations with northern neighbour Iran have been far from straightforward, and opposition groups have hampered a new National Development Plan. This chapter includes interviews with Emir Sheikh Sabah Al Ahmed Al Jaber Al Sabah; Italian Foreign Minister Giulio Terzi di Sant’Agata; and Lim Hng Kiang, Minister of Trade and Industry for Singapore.

In partnership with Hogan Lovells, OBG takes a look at Mongolia’s legal system. Key points include the mining regulations, developments in the banking sector, and the Concession Law.