Economic Outlook

Published October 18th, 2000 - 02:00 GMT

Kuwait’s new energy policy is consistent with the government’s overall plan of privatizing state-owned enterprises and economic liberalization. Other recent measures in this direction include a decree by Emir Sheikh Jaber al-Ahmad al-Sabah, issued while Parliament was dissolved in June 1999, allowing foreigners to own 100 percent of Kuwaiti firms and permitting them to invest directly in the Kuwaiti Stock Exchange. Kuwaiti officials hoped that foreign participation in the local bourse would attract fund managers and improve its performance, which dropped 40 percent last year because of low investor confidence and weak oil prices.  

 

In April 2000, Kuwait introduced a new health insurance scheme obliging the Gulf state’s expatriate workers and their families to have medical insurance. Economists believe the new plan will hit small companies hard and reduce consumer spending. This new insurance scheme is one of several steps aimed at slashing state expenditure and is part of a comprehensive economic reform package, not yet approved by parliament, which would fight the mounting budget deficit. However, the recent destruction of oil refineries may strangle the government’s projected oil revenues. 

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