Like most oil-rich nations, Kuwait has suffered greatly from the impact of the oil price crisis.

With oil making up 90 percent of state revenues, the Kuwaiti gov-ernment has long spoken of the need to develop a sustainable and diversified economy driven by the private sector. And the fact that the oil price is not expected to return to pre-2014 levels any time soon has compelled the government to get the wheels in motion to build a non-oil-dependent economy.

In January this year, the govern-ment launched ‘New Kuwait Vision 2035’, a comprehensive and ambi-tious development plan which aims to develop a prosperous and diversi-fied economy, upgrade national in-frastructure, improve the health and education systems, reform govern-ment administration and bureaucrat-ic procedures, and enhance Kuwait’s presence on the international stage.

Other objectives include posi-tioning Kuwait as a global hub for the petrochemical industry, increasing foreign direct invest-ment by 300 percent, and at-tracting more than $1.3 billion for investment in IT services and re-newable energy. Taking advantage of its strategic location, Kuwait also wants to operate as a transit hub providing significant logistical support to regional trade routes.

“The New Kuwait vision translates the Emir’s outlook for activating de-velopment, boosting the economy,

diversifying productivity, pressing ahead with economic and financial reforms through mega-projects and the leading role by the private sector,” said the country’s prime minister, Sheikh Jaber Mubarak Al-Hamad Al-Sabah.

The government also wants Ku-waitis to represent 40 percent of the population by 2035, up from the cur-rent 32 percent. To do so will require investment in education and training so that Kuwaitis have the skills to take up the jobs currently filled by expatriates. Reform of the education system, under Vision 2035, aims to better prepare Kuwaiti youth to become competitive and productive members of the workforce.

The public sector in Kuwait cur-rently accounts for 70 percent of

GDP and employs nearly 80 percent of the total Kuwaiti workforce, high-lighting the need to build a thriving private sector-led economy. Kuwait intends to invest billions to increase the contribution of the private sec-tor to the economy, from the cur-rent 26.4 percent to more than 40 percent by 2020. Government initiatives such as the public-private partnership (PPP) program, priva-tization law, the establishment of the Kuwait National Fund for SMEs Development and the Kuwait Direct Investment Promotion Authority are aimed at increasing the share of the private sector’s contribution to GDP.

The PPP program will be crucial for infrastructure development, as the government looks to tap pri-vate funding to complete a string

of mega-projects, some of which have been on hold for years.

Kuwait intends to spend $15.6 billion on infrastructure and other development-related projects in fis-cal year 2017-2018. The government will contribute 49.3 percent of the investments, 33.8 percent will be spent by the state-owned oil sec-tor and 16.9 percent by the private sector in a public-private sector partnership program, according to Dr. Khaled Mahdi, Secretary General of the Supreme Council for Planning and Development.

One of the highlight mega projects, and an integral part of ‘New Kuwait Vision 2035’, is the new terminal at Kuwait International Airport, which will be built by Turkish company Li-mak Construction at a cost of $4.2 billion. When completed in 2022, the new terminal will allow the airport to handle 25 million passengers annu-ally, triple its current capacity.

Other mega projects to be under-taken to achieve the goals set out in the ‘New Kuwait Vision 2035’ include: Sabah Al-Salem University City, one of the leading educational projects in the region; the Al Zour refinery, which will produce 615,000 barrels of oil per day when complet-ed in 2019; Jaber Hospital, which will be the largest hospital in the Middle East, with 1,166 beds; and the Jaber Causeway, a $3 billion bridge that will connect Kuwait City to the new $100 billion Silk City projected urban area.

New Kuwait Vision 2035 - A Future Beyond Oil‘New Kuwait Vision 2035’, the ambitious strategy unveiled in January to diversify the economy away from oil,

aims to allow a bigger and more active role for the private sector in economic development

K UWAIT

What are the most urgent re-forms, in your opinion, required to diversify the Kuwaiti economy and put the private sector as leader of the process?The most urgent and important is-sue in this regard is to shrink the public sector in order to allow for the private sector to have better access to the labor market.

This is done through several mechanisms: Firstly, through small and medium enterprises (SMEs). Secondly, through privatization: we have started a 25-year plan where several state-owned enterprises are being corporatized to entice the private sector to step in and look for profits and value. And thirdly, through the expansion of the Public-Private-People Partnership model together with a quota of Kuwaiti citizens that must be employed:

the so-called ‘Kuwaitization’. This quota varies through the different sectors. It also affects new foreign direct investment (FDI) that arrived through the Kuwait Direct Invest-ment Promotion Authority, as one of the requirements for the support of the agency is the employment of a quota of Kuwaitis and the creation of new employment for our citizens.

How is SCPD supporting the cre-ation of the knowledge-based economy? The SCPD has assumed the lead-ing role to promote the knowledge-based economy in Kuwait, with the objective of creating an eco-system for it. We started by establishing the National Knowledge Economy Cen-ter which is running several projects. We have also proposed a new law: the Economic Activity Law, that if approved will boost the application of the knowledge-based economy in Kuwait, focusing on public entities and allowing the private sector to increase revenue.

With the support of international investors, we founded the Kuwait

Knowledge Economy Chair, which is responsible for sending Kuwaitis abroad to obtain their Masters or PHDs on matters regarding the knowledge-based economy. This is a key measure to enhance our hu-man capital in this area.

We are exploring further part-nerships with regional and interna-tional organizations on the matter of the knowledge-based economy. We have also set up a “knowledge center”, which is a free-of-charge vir-tual library with books, articles and documents on the knowledge-based economy.

Finally, we created the national and regional “knowledge-based economy” report with knowledge economy KPIs in order to measure the position of Kuwait within the different indicators and help policy-makers to take better decisions in this regard.

How is ‘New Kuwait Vision 2035’ supporting Kuwaiti SMEs in their internationalization efforts to further diversify the national economy?

The Kuwait Expo 2018 that we are organizing will act as a platform to connect between Kuwaiti entrepre-neurs, the National Fund for SMEs and a global community of start-ups. It will take place February 6-10, 2018. We are offering a platform where to share knowledge across borders providing the required funds to start new projects or partner-ships based in Kuwait.

The Kuwait Expo 2018 is another step towards our goal of becoming a knowledge-based economy hub.

SCPD creating eco-system for the knowledge-based economyAn interview with Dr. Khaled A. Mahdi, Secre-tary General of the Su-preme Council for Planning and Development (SCPD)

Dr. Khaled A. Mahdi, Secretary General of the Supreme Council for Planning and Development