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NEW KUWAIT VISION

Reforms to reinforce transparency, accountability and efficiency in government

Article - October 19, 2017

The first pillar of the ‘New Kuwait Vision 2035’ aims to reduce bureaucracy, improve efficiency and extend e-government services

SHEIKH MOHAMMAD ABDULLAH AL-MUBARAK AL-SABAH, MINISTER OF STATE FOR CABINET AFFAIRS

Bureaucratic red tape and government inefficiency have long stifled foreign investment and the proliferation of local companies in Kuwait. If the country is to build a thriving private sector driven by foreign and domestic business – as envisioned in the ‘New Kuwait Vision 2035’ – these issues must be addressed urgently to improve the business and investment climate. That is why the government has set the first pillar of ‘Vision 2035’ to target reform of administrative and bureaucratic practices to reinforce transparency, accountability, and efficiency.

Comparing Kuwait’s ranking with the other member states in the Gulf Cooperation Council (GCC) in the World Bank’s Doing Business Index highlights the urgent need for bureaucratic reform. In the 2017 ranking, Kuwait dropped four places to 102nd (out of 190 countries surveyed), putting it in last place in the Gulf region. The United Arab Emirates (UAE) placed at 26th, Bahrain – 63rd, Oman – 66th, Qatar – 83rd, and Saudi Arabi – 94th.

Twenty key global indicators, and additional sub-indicators, will track and measure Kuwait’s progress with the ‘Vision 2035’ plan and its performance compared to other countries. Kuwait is aiming for a position within the top 35 percent of all countries by 2035. Some of these indicators will be related to the government efforts to improve the business climate.

‘New Kuwait Vision 2035’ is not Kuwait’s first attempt at an ambitious roadmap for development, but where it differs is through its focus on legislation and improving the business environment, something that was lacking in previous plans, according to Nemr Kanafani, a senior economist at the National Bank of Kuwait.

“In recent years, authorities understood that for Kuwait’s economy to be transformed, we need to focus on rethinking the economic laws and streamlining regulations in the private sector. Indeed, a new company law and efforts to simplify the rules for businesses are key to this new initiative, and those changes have already begun,” said Mr. Kanafani in a recent interview with Forbes Asia.

Approved by parliament in April, the amendment to the New Companies Law will ease procedures for establishing companies. Under the new law, investors are no longer required to deposit capital before establishing a company. This will help to attract investments from young entrepreneurs and support the growth of the small and medium-sized enterprises sector. This latest amendment will also shorten the time required to establish a company from four days to one day – a remarkable achievement considering that it used to take 63 days before the law was enacted.

In May, the Ministry of Commerce and Industry launched the new ‘One-Window Transaction’ at the Kuwait Business Center, in line with the implementation of the ‘paperless government’ initiative – another measure which will significantly reduce bureaucracy and streamline the administrative process for new investors.


“The New Kuwait Vision 2035 will transform our economy, create jobs, attract foreign direct investments and facilitate knowledge transfer in the fields of renewable energy, information technology and the services sector”

Sheikh Mohammad Abdullah Al-Mubarak Al-Sabah,
Minister of State for Cabinet Affairs

Other recent initiatives are aimed at tackling corruption, again an area in which Kuwait ranks behind its GCC neighbors in global indexes. In Transparency International’s latest Corruptions Perceptions Index, Kuwait placed at 75th. By comparison, the UAE and Qatar ranked 24th and 31st respectively, while Saudi Arabia sits at 62nd, Oman at 64th and Bahrain in 70th position.

The Anti-Corruption Law passed in 2016 paved the way for the recent establishment of the Kuwait Anti-Corruption Authority, which is a seen as a very positive step in the fight against corruption. The Authority is empowered to enforce financial and asset disclosures, and has already referred six senior civil servants and ministers – once seen as untouchable – to prosecution for failure to disclose financial assets. The Anti-Corruption Law also aims to create a protection program for whistleblowers, and to raise awareness and knowledge of corruption and its effects.

Further mitigation of corruption, as well as increased government efficiency, will be supported by the improvement of e-government services. It is an area in which Kuwait has made great strides under the ‘e-Kuwait’ initiative. In the UN’s E-Government Survey 2016, Kuwait ranked at 40th out of all countries surveyed, and is among the top 10 countries in Asia, ahead of all its GCC neighbors except Bahrain, which placed at 24th.

“Our goal is to build a more transparent government that in turn helps achieve the ultimate strategic goal represented by e-Kuwait, where all can enjoy quality e-services at all times wherever they are,” says Sheikh Mohammad Abdullah Al-Mubarak Al-Sabah, the Minister of State for Cabinet Affairs.

“The government plan is to acquire and develop their human resource professionals and at the same time upgrade the technologies in accordance with the e-government plans”.

Along with streamlined procedures, investors will also be able to take advantage of the new proposed free trade zones that will be built on the Kuwaiti islands of Boubyan, Failaka, Warba, Miskan and Auha.

Located in close proximity to the proposed $100 billion Silk City project, these five free trade zones will turn these barren islands into a commercial and investment hub, offering investors a range of legal and investment incentives. According to Sheikh Nasser Sabah, Al-Ahmad Al-Jaber Al-Sabah, Minister of Amiri Diwan Affairs: “The Vision 2035 aims to transform the north of the Gulf area into an exceptional free trade zone; a fertile environment to attract investments.”

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