The rise in oil prices is usually a signal for oil exporters in the Gulf Cooperation Council countries to spend and launch projects that satisfy their people, and this was true of Kuwait during 2014 and 2015 when the contracts that were awarded reached more than $20 billion annually, but the country’s long-running political dispute between the legislative and executive branches has disrupted the normal flow of projects.
MEED magazine reported that instead of rising activity, the growth of the projects market in Kuwait continued to be increasingly weak, as the value of completed projects (18.7 billion dollars) in the first seven and a half months of 2022 which greatly exceeded the award of new projects which is a meager one billion dollars.
The magazine noted that the country’s project market lost $70 billion in the past five years, as completed projects consistently exceeded new project tenders, noting that this discrepancy with the previous five years, when the project market value reached $50 billion, is very significant.
Even worse, MEED said, for reasons that are not understood, the chronic decline in investments continued even in the vital oil and gas sector in Kuwait, adding that “the state is willingly cutting its lifeline instead of reaching an agreement.”
It showed that while Kuwait’s somewhat unique political makeup has become a recurring concern for the country’s business landscape, its restrictions are increasingly turning this landscape into a cause for concern.
MEED stressed that Kuwait needs effective governance, passing budgets and commitments to spending on projects — not least in the oil sector — in addition to structural and financial reforms, noting that “in recent years, at one stage or another, each of these has become The needs are hostage to the political process.”
The magazine believes that this situation cannot continue indefinitely, explaining that what Kuwait clearly needs is to end the political differences between the two authorities, adding, “If a solution cannot be reached, some basic issues may begin to emerge,” noting that the rise in oil prices at the present time has given the government a financial outlet, so that more difficult decisions will be postponed, but there will come a time when the price of oil drops again, and it is better then That Kuwait is ready for that stage.