Apparently Kuwait has a "non-oil" sector that's about to spearhead growth
KFH Research have predicted that for in Kuwait the non-oil sector growth is likely to rebound to 4.6 per cent in 2013 on the back of further recovery in the manufacturing, construction and real estate sectors backed by strong government capital expenditure budget allocation for FY2013/14.
As mentioned in KFH’s previous reports, the policy agenda will continue to be framed by attempts to push through projects tied to the $105 billion 2010-14 Kuwait Development Plan (KDP), which includes a $2.1 billion airport expansion, the $3 billion Al Zour independent water and power plant project, several hospitals, roads, bridges and a new city.
The government's new four-year plan, which runs until fiscal year 2016/17, proposes the establishment of share holding companies, 50 per cent of which will be owned by Kuwaiti citizens, to implement development projects worth KWD 12 billion ($42.3 billion). The government also plans to boost electricity production, to create 77,500 jobs for Kuwaitis in the public and private sectors and to build 36,700 housing units by the end of 2017.
Kuwait is set to secure $1.43 billion financing from a consortium of banks for a power and desalination plant, one of the major projects in the Gulf Arab state's development plan. The Az-Zour North Power and Desalination project is Kuwait's first public-private partnership (PPP). The plant is part of a KWD 30 billion development plan announced in 2010, which also includes a refinery, new airport and major causeway. The plan is aimed at diversifying the economy and updating Kuwait's infrastructure which is out-moded when compared to regional peers such as the United Arab Emirates.
South Korea's Hyundai Heavy Industries will build the first phase of the project, which comprises a 1,500 megawatt natural gas-fired power plant and seawater desalination plant. Hyundai, which said it had taken over the contract from a GDF Suez-led consortium, said the first phase would be completed in the fourth quarter of 2016.
According to Kuwaiti officials, half of the total funding allocated to governmental projects, within the country's KWD 30.5 billion development plan, will be spent by the end of March 2014. Moreover, KWD 15 billion, i.e 50 per cent, is expected to be spent on more than 1,200 economic projects, most particularly, on the oil industry. Kuwait is aiming at paving the way for embracing more businesses by eliminating legislative or executive obstacles. Officials added that more privileges are being given to the private sector such as increasing privatization, Build Operate Transfer (BOT) and offset projects.
However, post April 2014 development plan cannot be determined immediately; as the main focus is to turn Kuwait into a financial and commercial hub; a target that is yet to be worked on. Nonetheless, no specific figures were released about the size of accomplishments that have been achieved as of yet in the country's economic and social development plan until it's all completed.
To recap, Kuwait Development Plan (KDP) is a series of five 5-year plans approved by Parliament in February 2010, stretching to 2035 and aimed at converting Kuwait into a trade and financial hub of the region. The First 5-year Plan is approximately KWD 35 billion; which covers projects across a variety of sectors, including mega projects aimed at developing: oil capacity, utilities, infrastructure (including residential cities), and services (especially healthcare and education).
- Mission impossible? IMF says Jordan needs 7 percent growth to fight poverty and unemployment
- Saudi's strong non-oil growth in February may signal new economic era for KSA
- Worth a gasp? Abu Dhabi’s inflation already up 2.1% in 2014's first two months
- What's the attraction? IIF says UAE’s economic stability wooing foreign capital investment
- Public-private partnerships may be key to take Gulf's economic growth to next level
- 2014: the make it or break it year for Kuwait's development efforts
- After a long, long delay, NBK to finance Kuwait's first public private partnership ever!
- Coming clean after a parliamentarian probing? Consortium for Kuwait's historic desalination facility revealed
- Kuwait’s first power tender closes Monday
- Kuwaiti cabinet gives nod to build private, public power plants