Investors should be protected from illegal competition
KUWAIT: Kuwait’s economic expert, Jamal AbdulRahim in an interview with Kuwait Times said that foreign investments in Kuwait, if they occur, will be limited to either speculation in the stock exchanges and the establishment of funds and portfolios for the clients of these companies, or investment through petroleum companies.
Other types of investments will be very limited as a result of the local monopoly policy and the unwillingness of competitors to enter the markets because of the high operational costs for investors, in addition to the weakness of the state’s local legislation that should protect investors from illegal competition.
AbdulRahim explained that the policies of the GCC countries encourage foreign investments. “During my period of work in Saudi Arabia, the government worked very hard to encourage foreign investors. Saudi Arabia provided some facilities to investors. In Kuwait, foreign investors don’t pay taxes, so enacting legislation to encourage investments will not benefit the state financially. As for the UAE, it adopted the approach of encouraging foreign investors after investors abandoned Lebanon during the Lebanese civil war. Bahrain and UAE took various initiatives to lure foreign investments. UAE passed laws that protect these investments and provided facilities for them,” he added.
AbdulRahim said that attracting foreign investment projects to Kuwait requires the enactment of clear laws that will protect these companies, especially since Kuwait’s financial returns in the current situation are very weak compared to other GCC countries.
He said that the repercussions of the decline in foreign investments on Kuwait will leave a strong and clear effect on Kuwaiti public funds, because the government is the one who will ensure the employment of its citizens and thus will spend large amounts of money. In addition, it will lead to a decline in the economic activities in Kuwait.
Regarding the contribution of foreign investment projects in providing job opportunities, AbdulRahim disagreed and explained that bureaucratic processes are discouraging investors. “As a realistic example, one of the international companies was established in Saudi Arabia in 2006, and there was a desire to establish an office in Kuwait, but the establishment of this office took nearly two years due to bureaucracy. And when the economic crisis occurred in 2008, the project organizers withdrew from Kuwait.”