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“We can put companies in contact with whomever they want to do business”

Interview - June 13, 2013
Before the discovery of oil, Kuwaitis were renowned international traders and their commercial acumen is still evident today. Abdul Wahab Al Wazzan, Second Vice-Chairman of the Kuwait Chamber of Commerce and Industry (KCCI), the umbrella organisation for the business community in Kuwait, discusses the business climate in the emirate with World Report, highlighting in particular the need for SME experience in the country and the increased potential for partnerships thanks to recently introduced legislation making joint ventures easier.
ABDUL WAHAB AL WAZZAN, SECOND VICE-CHAIRMAN OF THE KUWAIT CHAMBER OF COMMERCE AND INDUSTRY (KCCI)
ABDUL WAHAB AL WAZZAN | SECOND VICE-CHAIRMAN OF THE KUWAIT CHAMBER OF COMMERCE AND INDUSTRY (KCCI)
How do you view bilateral relations between Kuwait and the UK? 
 
That relationship [with the UK] helped Kuwait become one of the important countries in terms of oil production. The second important thing about the relationship between Kuwait and the UK is investment. At that time, access to money generated from selling oil had to go to Britain to be invested in UK currency. In the 1950s, they opened the Kuwaiti investment office in London, and they have probably already celebrated their 60-year anniversary this year. That means a lot: Kuwait and Britain have had a relationship for a long time, and it was successful. A lot of Kuwaitis have properties – no less than 50,000 properties in the UK are owned by Kuwaitis, and that is a lot. Also, Kuwaiti companies and the Kuwait Investment Authority (KIA) are investing in the UK. I remember when Prime Minister Thatcher privatised the economy; she came to Kuwait and asked us to invest in private companies there. Privatisation helped Britain to change. 
 
History is very important. A lot of Kuwaitis went to Britain to learn and study at different universities and schools, and they still do. Tourism is also important – Kuwaitis love Britain, because of that long relationship. A lot of people opened their eyes and they have seen English people in front of them. When Kuwaitis go to Britain, especially students, they stay with British families to learn English and about the culture. 
 
In 1961, when Kuwait was almost invaded, the first call came from British soldiers. They came to Kuwait and they stayed in the desert to help and protect Kuwait and its independence. Also, during the liberation of Kuwait when Saddam Hussein invaded Kuwait, Britain also helped liberate Kuwait with the American troops. There are a lot of important strands between Britain and Kuwait. We believe that the new Development Plan will help British companies to come and invest in projects like electricity, roads and bridges, and the underground project, as well as the new airport. There are a lot of big projects being developed in Kuwait.
 
The problem is the bureaucracy we have. I do not know how they are going to solve that issue. Today I read a statement from the Minister of Trade and Industry saying that we are copying the Emirates’ way of reducing time to issue licences to companies, by issuing a temporary licence which companies can use until they are issued with the real one. That is what they are doing in Dubai. People have learnt a lot from Kuwait, but now we are learning from them. 
 
I believe that there are a lot of opportunities for British companies here in Kuwait. Their advanced technology and know-how will also help them to compete with others, like the Japanese. I believe the Minister of Development [Honourable Rola Dashti] went to China and she asked Chinese companies to come to Kuwait to get a slice of the cake. We are investing a huge amount over the next five years – US$125 billion. We here at the [Kuwait] Chamber of Commerce provide all the information for British companies if they need any help or advice. The British know Kuwait very well though.
 
The Chamber of Commerce is the umbrella for the business community in Kuwait, and it has all the information about the companies here. There is also the British-Arab Chamber of Commerce in England, and the Kuwaiti Chamber of Commerce is probably a member. The history is part of the relationship between Britain and Kuwait. 
 
What do you think can be done to improve that relationship? You talked about breaking down bureaucracy on this side.
 
That is the most important point, as well as establishing new rules and laws for BOT (Build Operate Transfer) projects. We need to develop the BOT law, because it is not in line with our needs. When the National Assembly of Kuwait passed this law, they probably did not do it right, so we have to ask the government to send it back to parliament to change certain issues. Privatisation is also an issue in Kuwait – the law was passed in 2010, and we are still waiting. It is just like BOT – it has not been developed in line with Kuwait’s needs. We have to send it back to the National Assembly to repair it so to speak. British companies could get involved by managing hospitals or getting involved with government services and so on. 
 
They have got 35 years of experience in PPPs (public-private partnerships), so that would help.
 
That is right. We think that the new company law [Companies Law for Kuwait] that was passed a few weeks ago will help companies establish themselves and joint venture companies between British and Kuwaitis. I think you could also look into that as a new company law. That helps a lot and it will enable just one person to set up a limited partnership company. 
 
Who is in charge of this new company law?
 
The Minister of Commerce. Another very important thing is the fund for SMEs (small and medium-sized enterprises). I always talk and remind people of the number of small businesses in Britain, where the Crown Prince is the godfather of SMEs. We need the Crown Prince or the Prime Minister to be the godfather of small-scale industries, because they generate no less than 80% of Britain’s gross domestic product (GDP). These are things that British companies could look at. I also believe that we want young people to be employed in the private sector, step by step. That would help Kuwait a lot, and you have a lot of experience in that in Britain. They have special agents and offices that help young people look into new small businesses and direct them. We need that here. I think we should look into these things and take the experience from the British in these fields. Successful privatisation took place in Britain during the Thatcher era. I believe that when she started with the privatisation process, she was hit by tomatoes and eggs from demonstrators in the 1970s. After seven or eight years though, things changed. They started to cheer her, because she changed the entire economy. 
 
I believe that we need somebody to use the experience of the UK. Because of the relationship and history between the two countries, I believe we could invest a lot in the two countries. I know that Kuwait invests a lot in Britain, investing in English pounds, then property and certain private companies, and banking. That increases relations between the two countries. 
 
Dubai has benefited from British experience. A lot of development has taken place as a result of UK advice in that area. It would help advance the economy and the relationship between both countries. There are a lot of opportunities for both countries. I know some Kuwaitis who live in the UK now, and they have farms and sell milk in the UK. I know some Kuwaitis who started their businesses in the US; they have their own clinics or businesses. 
 
Before the oil, Kuwaitis were traders. They had 800 ships going all over the world. Some Kuwaitis started to go to Paris by boat to sell their products. This means that Kuwait’s mentality as traders and seafarers is everywhere. It is a small country, but at the same time, when I go to the UK, I see Kuwaitis. The Kuwaiti population is just like the Indian population – you see them everywhere. Kuwaitis are adventurers, and you see them everywhere. You see them in India, China, Britain and Germany. Our Chairman was a student in Germany, and he speaks fluent German. I cannot believe it now. It is such a small country with such a small population, and when you look at them, you would not believe that there are just one million [of them]. 
 
Kuwaitis are adventurous, and because of this, you will see them almost everywhere. They buy land in Dubai, Jeddah and everywhere. Kuwaitis have a special secret, and you have to open the box and look at the treasure. You cannot see that in a lot of countries. If you go to Iraq or Iran, they want to do business with Kuwaitis. That kind of confidence and trust has been built over the years. That makes Kuwaiti different. When you look at the area, it is the first country that established its own constitution and parliament, and there was democracy for 300 years, not just in 1962. The first ruler was elected. This is also important. Women’s rights are also important. 
 
It is inspiring. There is a popular saying in the Western media at the moment, which is that “Kuwait is the past, Dubai is the present, and Qatar is the future”. Could you explain why that is not the case, and why Kuwait should be the future for British investors?
 
The difference between what is happening in Kuwait and Dubai and Qatar is that you have to go through a system, just like in Britain. It is not a one-man show like it is in the others. That is good and bad – it is good to have a one-man show to cut out all the red tape and bureaucracy, but it is also not healthy if you do not have systematic rules and regulations. When you are just one person giving orders to build here and there, it is not a functional way of doing business. They have succeeded, but you do not know for how long. But here, if you have an economic crisis or shock or financial issues, at least you have institutions to help. You have parliament to check and balance, and you have free elections and other people have rights here, not just Kuwaitis. Expatriates have rights here in Kuwait, and they have education and a right to the health system. This is part of the Kuwaiti system. I would like us to charge for everything though, because you cannot build a country for free forever. You have to develop a taxation system, which we do not have. I believe we should have a tax system. 
 
In Kuwait, you could stand up in court yourself with the ruler. You could take anybody to court. We do not have untouchables here in Kuwait, whereas they do in other countries. But that is good and bad. Political issues delay development however, and that is what has happened in Kuwait. We are telling them that enough is enough. They should look into developing Kuwait and easing bureaucracy and red tape. If you look at Saudi Arabia, last year foreign investment amounted to no less than $15 to $20 billion. In the Emirates, it probably amounted to $6 to $7 billion, and Oman $2 to $3 billion. In Kuwait, it is less than $1 billion, which means that something is wrong. We cannot attract others to come over, because of our system. The Chinese told the Minister of Development that they cannot come to Kuwait with the level of bureaucracy here. The Chinese are telling us that we are backward. It is still just talk. We need actions.
 
Are they working towards executing those actions, or is it still moving slowly?
 
It is still moving slowly, but this is our country, and we have to live with it. We cannot really do anything else drastic. We need our government and parliament to look into this. We have had five bad years. If you look at Prophet Joseph with the Pharaohs in Egypt, it shows you how to develop your country. The Pharaohs started to believe in Joseph, and Joseph told them that Egypt would have seven good years and seven bad years. He said that they had to grow grains and corn over the good seven years and store it, and then keep it for the seven bad years. God taught Joseph to take care of that. He started to build that dream and turn it into a reality. That helped Egypt a lot in the bad days. We should look at this history and these stories, and try to use the excess money we have to build Kuwait and diversify our income. It should not just be from oil. We should do something like Norway is doing. We are producing and distributing, which is wrong. We should produce and then develop, build, operate and make the people work.
Most Kuwaitis are civil servants (90 to 93%), which is wrong. It is very dangerous. The surplus money should be distributed to make Kuwait a financial and services centre to help Iraq and Iran, and build railroads to connect the Silk Road to Azerbaijan and other countries. I believe these kinds of things should help Kuwait.
 
What is left for you as a businessman? What would you like your legacy to be here in Kuwait? 
 
The government should help the private sector to work independently and try to privatise all the services that the government has, and try to generate income from new methods, like making Kuwait a financial centre, in line with what His Highness the Amir wants. They have not yet accomplished this dream. We are in a very strategic location, and we can help countries around us, like Iraq and Iran with a lot of opportunities to develop their countries through Kuwait. British companies could set up bases here in Kuwait. We want to make Kuwait the centre of services. 
 
We have to open up our market and ease bureaucracy and red tape, to help others come to Kuwait. We have been busy talking politics compared to business, and we need somebody to teach us how to specialise. When you speak to a Kuwaiti, he could be a doctor, politician, carpenter and builder at the same time. We talk about everything. When there is a war, a Kuwaiti will look at a map, and say that if the army goes this way, they will succeed. We think we know everything. 
 
Luxury makes us lazy. Almost everything is free, so people have stopped working. The Kuwaitis just sit and receive salaries in government. This is the crisis. When you see Kuwaitis in a crisis, they do the best they can, and they are good inventors. They know how to work and help themselves, but when you put them at ease, everybody wants to sit down and ask their servant to bring the water over to them.
 
What final message would you like to send to the readers of The Independent?
 
The Chamber of Commerce will help any company that wants to come over to Kuwait. We are open here and provide information on businessmen, banks and construction companies. We can put companies in contact with whomever they want to do business. This is our role, and we would be more than happy to help develop historic relations further.
 
If UK companies want to come here and open a business, what is the first thing they have to do?
 
Always check the people they want to work with, and ask the Chamber of Commerce for advice. They will help. I believe that this is the right way for businessmen to be protected and know how to do things right. We should be the first point of call. We are ready to do our best.  

COMPANY DATABASESee all Database >

ABLIC Inc.

Manufacturing, Japan

Atago Ltd.

Manufacturing, Japan

UNIFLOW CO., LTD.

Manufacturing, Japan

LEADER DATABASESee all Database >

Nobumasa Ishiai

President and CEO, ABLIC Inc. Senior Managing Executive Officer, MinebeaMitsumi Inc. (Parent Company of ABLIC)
ABLIC Inc.

HIROSHI KOYAMA

MANAGING DIRECTOR
JUJO CHEMICAL CO., LTD.

Yoshihiko Hirano

President & CEO
Hirano Steel Co.,Ltd.

Yorifusa Wakabayashi

President and Representative Director, Chief Executive Officer
DAIO PAPER CORPORATION

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