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KDIPA urges more coordination for better business atmosphere in Kuwait
October 26, 2016, 5:41 pm
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Kuwait Direct Investment Promotion Authority (KDIPA) stressed the need to harness the current serious reform efforts by embarking on further coordination to improve doing business in the country which is a major pillar to achieve its aspired developmental goals for diversifying sources of income and encouraging local and foreign investment.

Commenting on the results that showed Kuwait rank in the Ease of Doing Business Report 2017 (DB2017) published annually by the World Bank Group, KDIPA referred to the drop in Kuwait's rank in the said indicator, which measures 10 aspects relating to business activity, to 102 out of 190 countries as compared to its amended rank at 98 out of 189 countries in DB2016, highlighting that Kuwait beheld the top 6th rank globally in paying tax sub indicator.

Whereas in the parallel measure based on the Distance to Frontier (DTF) comparing performance against international best practices, Kuwait recorded 59.55% in the DB2017 as compared to 60.12% (amended) in DB2016. Within DTF, it showed improvement in two sub indicators (trading cross borders, resolving insolvency), maintained unchanged status in four sub indicators (getting credit, protecting minority investors, paying taxes, and enforcing contracts), but dropped in the four remaining sub indicators (starting a business, dealing with construction permits, getting electricity, and registering property).

KDIPA stressed that the collective resolve in improving regulatory performance will not be inhibited, despite the strenuous international and regional circumstances, as well as the intensified pressures and rising challenges surrounding the national economic and reform decisions.

It added that current efforts will require more rigorous approach and applicability in order to better identify areas of concern and ensure progress in the right direction. In this regard, KDIPA clarified that the actual impact of several important decisions and measures undertaken so far to streamline business environment during the report period from beginning of June 2015 till end of May 2016, did not actually materialize to effect notable changes in advancing Kuwait's position in this report.

In the same token, and given the magnitude of attention this report generates within the public and the business community, KDIPA finds it imperative to highlight other technical and methodological considerations in the case of Kuwait that might have hindered to reflect the intensity of the efforts exerted to effect positive changes in its position in this indicator.

These include the frequent changes in the report methodology, and constraints of the report preparation cycle, the degree of commitment by the relevant government entities in reporting improvements in the legal and regulatory measures, as well as the varying perceptions of the contributors, composed of business people, law firms, consultants among others, expressed in their response to the questionnaires allocated for each sub indicator.

KDIPA commended the "improvement" reform identified by the report regarding the sub indicator on trading cross borders, because it made importing and exporting easier in Kuwait based on introducing e-links and e-transactions between the General Directorate of Customs and other related authorities.

Whereas it noted that the report identified a "more difficult" measure in the sub indicator for starting a business for registering companies, particularly for limited liability companies that the report exclusively focuses on, because of introducing "online service" to request appointments, in addition to the condition of attending in person to submit original documents; complicated by the need to return to the online every time an additional or amended document is needed, thus doubling time needed for completing companies' registration.

In this regard, KDIPA explained that a "milestone" step undertaken to rectify the situation described above, but the report did not depict its impact, lied in the issuance of Minister of Commerce & Industry Decision No. 161/2016 on April 20, 2016, as amended by Ministerial Decision No. 280/2016 issued on July 10, 2016, regarding the establishment of a One Stop Shop Department under the direct supervision of the Minister. This is expected to expedite the process of for commercial licensing and registration, supported by explanatory guides and listed fees, and keeping open channels with the public with full clarity and transparency.

In this case, adherence to the report's methodology framework prevented to show the impact of this step and any repercussions of these efforts and measures on starting a business that accrued within the report's period and continued afterwards, including the official opening of the National One Stop Shop on September 29, 2016, and the simultaneous launching of the online version under the name Kuwait Business Centre (KBC).

KDIPA urged to adopt an objective reading of Kuwait's reality, and the recognition of the pivotal role of economic issues within the government priorities. To succeed, the full collaboration of all related authorities is needed, intensification of process of documenting all the measures and decisions relating to improve doing business, and communicating developments to the public to ensure reaping the benefits of reform. On the other hand identify the needed legal and regulatory improvements that will advance Kuwait's rank in this and other indicators in the coming years.

A testimonial of the seriousness of this drive is the establishment of the Permanent Committee for Streamlining Business Environment in Kuwait, with membership of various concerned government entities; in addition to the formulation of follow up teams at those government authorities, that held frequent meetings to discuss relevant issues, last of which a technical workshop held by KDIPA over the last three days in cooperation with the World Bank experts provided under the technical support agreement signed between both parties on March 2016 to streamline doing business in the State of Kuwait based on this indicator.

The outcome of these efforts will produce proposed reform priorities for the short and medium terms, which, once approved, will provide the platform for a national reform action plan.

KDIPA concluded its commentary by stressing the need for continued close coordination, documentation, and communication, amongst all the concerned authorities to maximize the intended impact on improving doing business.

Source: KUNA

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