Northern Economic Zone adds up to KD 7 billion to Kuwait’s GDP: Official
KJA hosts ‘Draft Law for the Northern Economic Zone’ symposium
KUWAIT: The Northern Economic Zone will add KD 5 - 7 billion addition to the gross domestic product (GDP), a senior official said. “It will be established on an area of 1,655 square kilometers that includes a net space of 900 square kilometers for developing,” said Osama Al-Qrawi, Member of the Business Team of the Northern Economic Zone during a presentation on Sunday. “The Zone will include 42 main projects and different activities including Mubarak Port, railway routes, a green zone, and others. The total value of these projects is KD 22 billion, which will be mainly financed by the foreign investor and the private sector. The whole project is valued between $450 - 600 billion.”
Qrawi made his presentation as part of a symposium titled ‘Draft Law for the Northern Economic Zone’ that was organized by the Kuwait Journalist Association (KJA). “These projects will offer between 220,000 210,000 job opportunities. The Zone will also house between 420,000 and 440,000 people from all nationalities. But it needs governmental support especially in the beginning, and issuing the draft law is the first step,” he added.
“This is a project for the next generation of Kuwait that will be financed by world financial markets and directed by the private sector. This zone should be administratively independent under Kuwait’s sovereignty and work according to the constitution, forming security support inside and outside Kuwait,” he stated.
This Zone has great strategic importance. “Furthermore, it will be the gate of the northern border supporting modern urban life. It will be an incubator for commercial projects, as well as social and cultural activities,” he further said.
According to Qrawi, there are over 3,000 free trade zones around the world. “For instance in Dubai, the Jebel Ali Free Zone is spread over 57 square kilometers and provides 144,000 job opportunities. In 2016, it generated $87 billion in income, which equals 20 percent of Dubai’s local production. It is a great support for Dubai’s economy, even more important than tourism,” he added.
Kuwait’s Northern Economic Zone will be even more important from the international strategic view. “It will improve the regional security of Kuwait and local security as well. It will present another source of income for our economy, which is very important especially if a new clean energy source was established. We are facing many challenges including economy, job market, sustainability, infrastructure and many others,” he explained.
The team did intensive studies for over a year, carried out by international consultants. “This study discusses Kuwait in the next 25 years. The team members did field visits to other trade and economic zones around the world to get the best experience. Our study was based on direct communicating with the foreign investors to encourage them to invest in Kuwait,” stated Qrawi.
This project represents various sectors. “These include the health and environment tourism, and the environment and free zone as main sectors. The supportive sectors include retail, school education, banking, and healthcare. These are the basics for building cities. We also need the public institutions, entertainment and other utilities,” concluded Qrawi.
Sara Akbar, Member at the General Secretariat for the Supreme Council for Planning and Development, said that oil is the mainstay of the Kuwaiti economy, and “our complete dependence on it makes our economy unilateral.” “For many years, we heard about the need to diversify sources of income,” she said. “The idea of the Northern Economic Zone came to be part of efforts in diversifying the sources of income.”
“This area will allow investments in different areas and islands that were not developed yet. This project will create a trade zone for creative investors and will provide new job opportunities for young Kuwaitis for a better life. The main idea of this venture is to create more projects, and to be completely managed by Kuwaiti institution,” she added.
Constitutional expert Mohammed Al-Faili explained the legislation process of the Northern Zone. “The draft law for this project can be submitted by either the government or the parliament, and in the end, it should be approved by the parliament. The main idea of this law is to establish a zone for certain commercial activities known as a free trade zone, which is popular all over the world,” he noted.
“This zone should be managed by an institution formed especially for this purpose according to the constitution with specified duties. This institution has a legal personality to deal with the government and other organizations, thus it cannot sign agreements with other countries as it does not have the status of a country,” Faili pointed out.