Kuwait and Gulf Cooperation Council (GCC) countries need to step up efforts to broaden their economic base and diversify their economic activities in order to reduce their dependence on oil as the main source of national revenue, said Kuwait's Minister of Finance Anas Al-Saleh, opening on Wednesday the IMF conference on economic development, diversification, and the role of the state.
Attending the conference was IMF Deputy Managing Director Zhou Min. The conference was organized conjointly by the IMF and the Ministry of Finance.
In his speech to the conference, the Kuwaiti minister indicated that the Kuwaiti economic growth model has delivered substantial improvements in living standards and welfare to the people over several decades. It has also, he said, ensured a sufficient level of infrastructure, and high quality public services.
However, he noted, that this growth model has incurred many costs such as the public-sector wage bill is currently very high as a percentage of public spending, subsidization of basic goods is exhausting the state's budget, non-oil public revenues are never an important portion of total government revenues, the participation of national labor in the private sector is very low and above all, there is limited progress on economic diversification.
Nonetheless, Kuwait has initiated a number of steps introduced to enhance the business environment and encourage the private sector lead development and create jobs, said the minister.
Moreover, he added, Kuwait opens more channels for the public-private-partnerships (PPP) through the "Partnerships Technical Bureau" which aims at developing and promoting initiatives of PPP in Kuwait. Furthermore, Kuwait has established the National SMEs Fund to promote young businesspeople.
Though the country has a long way to go in this development reform process, since some of the reforms needed to promote private sector growth are complex and will take time to pay off, the Finance Minister nevertheless stressed that all efforts will be tapped to make sure that the door is always wide open to national and foreign private sector initiatives.
He thanked in the end the IMF for helping to organize this conference on economic diversification which he said is a subject of crucial importance to Kuwait and other GCC countries. (