Being one of the members of the Organization of the Petroleum Exporting Countries and being an exporter of oil and natural gas, Kuwait’s economy significantly relies on the exportation of the hydrocarbon. It has proven reserves of some 6% of international oil and is accorded the seventh position in the global producers and exporters list.
The petroleum industry contributes closely to half of Kuwait’s GDP, three quarters of its export earnings and government receipts. According to the government of Kuwait it is planning to achieve an overall oil production facility of 4 million barrels per day by the year 2020. This consideration supports the recently made investments in; new techniques in improved oil recovery, and search for new exploitation of other breakthrough resources suggesting Kuwait aims to use hydrocarbon stock for future development.
Financial and Banking Sector
Kuwait has well developed financial and banking system considering that majority of facilities are located in Kuwait City. It includes more than a dozen of domestic and foreign banks that offer business banking and consumer banking services.
Kuwaiti banking industry appears to be solidly capitalized and profitable, primarily engaging in corporate borrowing financed by oil revenues. It has been further observed that the sector is not very sensitive to the fluctuations in state’s economy and especially it did not much hampered due to the 2008 global financial crises. Kuwait also has a rather developed system of stock exchange titled Boursa Kuwait, which has 207 companies and $ 103 billion in market capitalization.
The liberalisation as well as the modernisation of capital markets are in a way to turn Kuwait into a regional financial centre. These ideas could expand markets if the country permitted overseas firms to invest and trade equity and debt on the exchange.
Transportation and Logistics Framework
Being on the crossroads of trade and commerce in the Gulf region, Kuwait is putting a lot of effort to improve transport connection and logistics networks. Recent improvements of Kuwait means new roads, upgrading of the airports, construction of new seaports, creating of new logistics zones to strengthen the transport and logistic power of Kuwait.
Al Hamra Port which has recently been upgraded and Sheikh Jaber Al Ahmad Al Sabah Causeway connecting Kuwait City to Subiyah have more capacity for accommodating the growing through traffic. To boost foreign trade and investment there are planned further enhancements of aviation facilities such as the Kuwait International Airport and transport channels leading to bordering nations.
Real Estate and Construction
Increased population growth as well as increased number of people moving into urban centers to is likely to drive high demand for development of property. Construction industry contributes towards approximately 10 percent to the gross domestic product of Kuwait.
Large scale works’ factor includes dwelling constructions, both in the residential area and commercial construction like South Saad Al Abdullah City to cater for the young and growing population of Kuwait. The desire also builds housing in Kuwait city and its environs also fuels residential construction and hence the following attractions.
New highways, hospitals, power plants and stadia remain a magnet for international construction companies in search of more lucratively rewarding contracts. Real estate and construction business is therefore expected to fund the growth of the economy significantly.
Education, Training and Vocational and Employment Creation in the Private Sector
Due to weak human resource development, more than 90% of Kuwaiti nationals are found in the public sector, emphasis should therefore be placed on the development of the private sector to support future job creation. These demands have led to education reform to prepare the Kuwaitis to meet demands of private sectors. Further reforms seek the enhancement of efficiency of the bureaucracy for the ease of doing business, increase in entrepreneurship and attraction of multinational firms to set up regional offices in Kuwait. Coming up with good paying private sector jobs that citizens want to do has continued to be a challenge.
As one of the World’s richest countries with gross domestic product per capita, Kuwait has the capability in offering citizen a high quality lives. However, this extensive state spending can be very problematic if it puts a great deal of pressure on the state’s fiscal capacity owing to low oil prices. Its prognosis hinges on reform Torres to end subsidies, boost non-oil revenues, foster private sector employment and maintain citizen’s benefits when maintaining oil wealth. With this, the performance dimension of rural governance will be key in ensuring economic development goals align with citizen’s expectations.