Kuwait economic development

The government in Kuwait have passed an economic development plan which authorises the government to spend 30 billion dinars over the next four years on mega projects.

The plan includes boosting the OPEC country's oil production capacity and modernising oil facilities.

The aim of the plan is to turn Kuwait into a regional trade and financial centre and help reduce its dependence on oil revenues, which currently account for around 94 percent of total state income.

The 2010-2014 plan initially projected spending of up to 129 billion dollars but Kuwait's deputy prime minister for economic affairs told parliament the figure has been scaled down, AFP reports.

Sheikh Ahmad Fahad al-Sabah later said the spending figures "are only estimates that could be altered in accordance with needs."

The plan

This is the first plan of its size since 1986. It includes projects such as developing the new Silk City business hub at an estimated cost of US$77 billion, as well as a major container harbour and a 16-mile causeway.

It also includes a railway and metro system, other new cities and additional spending on infrastructure, particularly in health and education.

The plan aims to boost the role of the private sector in an economy in which the public sector accounts for almost three-quarters of Gross Domestic Product.

Parliament approved the plan just a day after the cabinet authorised capital spending of 16.6 billion dollars in the first year of the plan. A further 7.7 billion dollars will be spent by the private sector, according to Sheikh Ahmad.

Political arguments have delayed the progress on many of Kuwait's development projects over the past few years. Kuwait has amassed huge foreign assets in the past decade, worth an estimated US$230 billion and mostly located abroad, on the back of high oil prices.

Kuwait has the world's fifth largest oil reserves and petroleum. Petroleum products now account for nearly 95 percent of export revenues, and 80 percent of government income. Kuwait is the eleventh richest country in the world percapita and has the highest human development index (HDI) in the Arab world. Kuwait is classified as a high income economy by the World Bank

Kuwait has a proven crude oil reserves of 104 billion barrels (15 km³), estimated to be 10 percent of the world's reserves.

 

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