‘Kuwait accelerates industrial shift as war rattles regional economies’
From oil to industry, Kuwait’s diversification drive gains urgency amid conflict fallout
The World Bank has highlighted Kuwait’s accelerating shift toward activating industrial policy as a key driver of long-term economic diversification, underscoring the growing role of sovereign wealth funds and state-backed institutions in this transformation.
In its latest report on the regional economic outlook, the bank noted that Kuwait is leveraging national development strategies to address structural market gaps and empower the private sector, with the aim of reducing heavy reliance on energy revenues and mitigating exposure to oil price volatility.
However, the report warned that the ongoing conflict involving the United States and Israel on one side, and Iran on the other, is already inflicting significant economic damage across the Middle East, reports Al-Rai daily.
It pointed to disruptions caused by the closure of the Strait of Hormuz, alongside damage to energy infrastructure and public facilities, which have collectively unsettled markets, heightened financial volatility, and weakened growth prospects for 2026.
Ousmane Dione, Vice President of the World Bank for the Middle East, North Africa, Afghanistan and Pakistan, stressed that the crisis underscores the urgency of proactive economic reform.
“The challenge is not only to withstand shocks, but to rebuild more resilient economies,” he said, calling for stronger macroeconomic frameworks, enhanced governance, investment in infrastructure, and the development of innovative, job-creating sectors.
Dione also emphasized that sustainable development in the region hinges on stability, noting that peace is a prerequisite for building competitive economies and unlocking long-term growth opportunities.
