Call to revisit privatisation laws to lessen risk factor for private sector investors

Kuwait, 21 August 2011: A reconsideration of Kuwait's privatisation laws would bolster the country's efforts to attract investors for its build-operate-transfer projects, according to Faisal Hamad Al Ayyar, Vice-Chairman of Kuwait Projects Company (KIPCO).

Al Ayyar told the global publishing, research and consultancy firm Oxford Business Group (OBG) that the legislation introduced so far in Kuwait fell short of offering investors the incentives and security they were looking for, given the extent of the slowdown caused by the global economic crisis.

"We are not seeing these projects going forward for the time being as they are not attractive enough and leave most of the risk on the side of the private investor," he said. "These laws will have to be revisited."

He also believes the private sector should play a leading role in the economy, saying private businesses would deliver higher quality services at lower costs across a number of sectors.  "The whole economy would be better run by the private sector," he said. "Governments should aim to be regulators rather than operators."

The full interview with Al Ayyar appears in The Report: Kuwait 2012, OBG's forthcoming guide on the country's economic activity and investment opportunities. The Group's report will include a detailed, sector-by-sector guide for foreign investors, together with a wide range of interviews with the most prominent political, economic and business leaders, including the Emir of Kuwait Sheikh Sabah Al Ahmad Al Jaber Al Sabah and the Governor of the Central Bank Sheikh Salem AbdulAziz Al-Sabah.

Al Ayyar acknowledged it would take time for the Kuwaiti government's spending package to produce results. But he said the intervening period could provide the country with an opportunity to improve its contracting capabilities and put the infrastructure needed for large-scale projects in place.

"At the moment the plan is moving at a slow pace relative to expectations and most people are still waiting. But we as a nation are not set up for this kind of development," he said. "If the government is committed and everything runs smoothly through parliament, I think we should start seeing momentum by 2013."

He believes Kuwait has different lessons to learn from the economic crisis than the West, since the country's problems stemmed from over-leveraging and a mismatch between projects and financing rather than toxic assets. "Borrowing was much too easy and loosely regulated," he said. "All of these factors combined to create catastrophic problems. These are the issues we have learned to avoid."

The Report: Kuwait 2012 will mark the culmination of more than six months of on-the-ground research by a team of analysts from OBG. It will provide information on opportunities for foreign direct investment into Kuwait's economy and will act as a guide to the many facets of the country including its macroeconomics, infrastructure, banking and sectoral developments. It will be available in print form or online.

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About Oxford Business Group
Oxford Business Group (OBG) is a global publishing, research and consultancy firm, which publishes economic and political intelligence on the markets of the Middle East, Africa, Asia, Eastern Europe and the Caribbean. Through its range of print and online products, OBG offers comprehensive and accurate analysis of political, macroeconomic and sectoral developments, including banking, capital markets, insurance, energy, transport, industry and telecoms. 

The critically acclaimed economic, political and business reports have become the leading source of business intelligence on developing countries in the regions they cover. OBG's online economic briefings provide up-to-date in-depth analysis on the issues that matter for tens of thousands of subscribers worldwide. OBG's consultancy arm offers tailor-made market intelligence and advice to firms currently operating in these markets and those looking to enter them.

For more information please contact:
Oxford Business Group, Dubai, PO Box 502 659, Dubai, UAE
Kate Taylor, PR Manager
Phone: +971 44 264 642
E-mail: ktaylor@oxfordbusinessgroup.com

Action Kuwait/ Part of Action Global Communications
Sara Alsaleh, Senior Account Executive
Phone: +965 2491 5616
E-Mail: sara.s@actionprgroup.com

© Press Release 2011