Kuwait is in the 49th rank among 109 businesslucrative states globally, says a leading entrepreneur. The Gulf country had lured USD 15.2 billion worth of accumulated assets for direct foreign investments till 2017, according to estimates by UNCTAD, the United Nations Conference on Trade and Development, said Fahad AlIbrahim, DirectorGeneral of the Arab Investment and Export Credit Guarantee Corporation (Dhaman).
Moreover, it has succeeded in attracting 466 foreign companies since 2003 till last October. They have executed 387 enterprises at a cost estimated at USD 13 billion, he said, noting that 205 Kuwaiti companies invested USD 80 billion, during the same period, in 500 ventures worldwide.
Kuwait, an active state in commerce, trades in commodities and services, also according to UNCTAD, at a proportion of 95 percent of the gross domestic product, with commodity trade accounting to 73 percent of the GDP.
It posted surplus in commodity trade, exceeding USD 21 billion, with exports worth USD 55 billion and imports at USD 34 billion in 2017, added the corporation director general in an exclusive interview with Kuwait News Agency (KUNA). Oil constitutes approximately 80 percent of Kuwait’s overall commodity exports. Commerce with Arab countries some 15 percent of the external commodity trade.
The commodity exports accounted to 46 percent of the national product, after the latter’s growth by 18.7 percent in 2017. Manufactured products accounted to 7.8 percent of the total commodity exports, with an average export per capita estimated at USD 978 per annum.
With respect of Arab states, AlIbrahim said the corporation has recently observed demand increase for insurance concerning mega infrastructural ventures in some troubled Arab countries, thus forecasting hike in funding and insurance concluding that the corporation may have an opportunity for “playing a larger role” in these countries.
Dhaman has observed some improvement in the investment environments in the Arab countries, since the 80s, he says, however their share in the inflow of direct foreign investments, globally, has not exceeded 3.5 percent, between 2000 and 2017.
Value of Arab commodity commerce and services reached USD 2.1 trillion in 2017, five percent of the global trade. The Arab region used to benefit from the commodity trade, with a surplus in exports, as compared to imports, however, this glut turned into deficit due to the oil prices’ decline for the crude oil accounts to 58 percent of the Arab commodity exports. “Regretfully, all Arab states incur deficit in the industrial products’ trade, exporting products worth USD 234 billion, less than two percent of the global industrial products worldwide,” AlIrabim elaborates.
Although the interArab trade grew to USD 108 billion per annum, it remained less than 15 percent of the total external Arab trade. Moreover, two thirds of the interArab trade is actually among the Gulf countries.
Economies of the Gulf countries continue to hinge on the oil prices and production, as the crude has remained accounting to 58 percent of the region exports and more than 60 percent of the governments’ income higher by 35 percent of the national product.
Elaborating further, AlIbrahim believes that instability and security concern remain a common worry for the Arab countries, opining that development schemes have been implemented at a slow pace.
Likewise, the case with the income diversification strategies, in addition to a chain of other factors, namely decline of scientific research, education, human development, low productivity, weak production and exportation in the nonoil sectors.
As to Dhaman’s activities, AlIbrahim says it has insured a number of enterprises in Arab countries, namely in agriculture, transport, cement, medicine, pharmaceuticals, communication, tourism, oil and energy.
The corporation, with 575 accredited banks throughout the world, has launched operations worth USD 11.2 billion since 2011, at an annual rate of USD 1.4 billion, some 60 percent of the accumulated assets since its establishment in 1974 worth USD 18.6 billion, 25 percent of which for insuring investments and 75 percent as exports’ credits.
It has paid compensations estimated at USD 175 million for exporters and entrepreneurs as well as Arab banks. Dhaman was founded in 1974 as an Arab authority, owned by Arab governments and four financial authorities headquartered in Kuwait. It encourages Arab and foreign investments in the Arab countries by insurance coverage against noncommercial hazards for investors, Arab and foreign financiers.