A national strategy for developing Kuwait’s economic investment system

The National Observatory for Sustainable Development and Future Foresight of the General Secretariat of the Supreme Council for Planning and Development called for presenting a national strategy to develop the economic investment system in Kuwait. This would lead to protecting investors by creating initiatives, implementing procedures that motivate them to participate effectively, and creating economic protection initiatives for all segments of society in order to improve the standard of living for all.

This came as part of a set of recommendations in a report issued by the Observatory to enhance economic freedom in Kuwait, which advanced 18 places globally on the Economic Freedom Index, ranking 90th globally in 2024 instead of 108th in 2023. It also ranked sixth in the Arab and Gulf countries, after representing the country’s economic freedom as higher than the regional average for the year 2024.

The report indicated that the Kuwaiti economy is generally open to foreign investment, but some sectors are still restricted and must be liberalized, while the modern financial regulatory system facilitates portfolio investment, and the banking sector is still well capitalized. The degree of monetary freedom in Kuwait is higher than the global average.

The Economic Freedom Index 2024 shows a noticeable improvement in some indicator values for Kuwait, as the Business Freedom Index rose by 9.36% to 65.2 during 2024 compared to 59.1 during 2023, and the Business Freedom Index rose by 1.7% to 53 during 2024 compared to 52.1 during 2023, and the Freedom to Trade Index remained at 75.6, Freedom of Investment at 55, and Financial Freedom is at level 60 during 2024, which was the same in 2023.

The report showed an improvement in the averages of government spending and the budget for 3 years in a row, in addition to a decrease in the percentage of public debt to 3.1% of the gross domestic product.

The report indicated that Kuwait achieved the target in accordance with the Third Development Plan in 4 of the sub-indices that make up the index for the year 2024, while the report made 10 recommendations to enhance economic freedom in the country as follows:

1. Proposing a national strategy to develop the economic investment system in the country, and transforming it into a financial center. Global commensurate with global economic power and international situation.
2. Diversifying sources of income and production base, as financial policy in Kuwait relies almost entirely on oil revenues to cover public spending.
3. Achieving economic sustainability in developing the various investment sectors in the country.
4. Developing training and professional development methods to achieve good investment in human capital, raise the level of performance of workers in all financial sectors in the country, build national capabilities and competencies, and develop relevant performance indicators.
5. Establishing an integrated electronic portal to serve the financial sector in the country and investment, in a way that contributes to advancing economic growth, facilitating the operations of the import and export system and free zones in the country, facilitating business registration processes, and flexible regulatory frameworks to encourage entrepreneurship and foreign direct investment.
6. Improving the performance of public finances in terms of good management, confidence in the strength of the economy, and stimulating innovation in the economic sector.
7. Supporting the rule of law index, which measures the extent of individuals’ confidence in the laws imposed by the state in order to protect property rights, and enhance judicial and comprehensive effectiveness and quality of services.
8. Formulating policies that contribute to improving the performance of the financial sector and raising economic growth rates.
9. Creating economic protection initiatives for all segments of society to achieve a decent life and improve the standard of living for all.
10. Protecting investors by creating initiatives and implementing procedures that motivate investors to participate effectively.