KUWAIT: Kuwait isin the 49th rank among 109 business-lucrative states globally, says a leadingentrepreneur. The Gulf country had lured $15.2 billion worth of accumulatedassets for direct foreign investments till 2017, according to estimates byUNCTAD, the United Nations Conference on Trade and Development, said FahadAl-Ibrahim, Director-General of the Arab Investment and Export Credit GuaranteeCorporation (Dhaman). Moreover, it has succeeded in attracting 466 foreigncompanies from 2003 till last October. They have executed 387 enterprises at acost estimated at $13 billion, he said, noting that 205 Kuwaiti companiesinvested $80 billion, during the same period, in 500 ventures worldwide.
Kuwait, an activestate in commerce, trades in commodities and services, also according toUNCTAD, at a proportion of 95 percent of the gross domestic product, withcommodity trade accounting to 73 percent of the GDP. It posted surplus incommodity trade, exceeding $21 billion, with exports worth $55 billion andimports at $34 billion in 2017, added the corporation director general in anexclusive interview.
Oil exports
Oil constitutesapproximately 80 percent of Kuwait's overall commodity exports. Commerce withArab countries some 15 percent of the external commodity trade. The commodityexports accounted to 46 percent of the national product, after the latter'sgrowth by 18.7 percent in 2017. Manufactured products accounted to 7.8 percentof the total commodity exports, with an average export per capita estimated at$978 per annum. With respect of Arab states, Ibrahim said the corporation hasrecently observed demand increase for insurance concerning mega infrastructuralventures in some troubled Arab countries, thus forecasting hike in funding andinsurance -- concluding that the corporation may have an opportunity for"playing a larger role" in these countries.
Dhaman hasobserved some improvement in the investment environments in the Arab countries,since the 80s, he says, however their share in the inflow of direct foreigninvestments, globally, has not exceeded 3.5 percent, between 2000 and2017.Value of Arab commodity commerce and services reached $2.1 trillion in2017, five percent of the global trade. The Arab region used to benefit fromthe commodity trade, with a surplus in exports, as compared to imports,however, this glut turned into deficit due to the oil prices' decline -- forthe crude oil accounts to 58 percent of the Arab commodity exports.
"Regretfully,all Arab states incur deficit in the industrial products' trade, exportingproducts worth $234 billion, less than two percent of the global industrialproducts worldwide," Ibrahim elaborates. Although the inter-Arab tradegrew to $108 billion per annum, it remained less than 15 percent of the totalexternal Arab trade. Moreover, two thirds of the inter-Arab trade is actuallyamong the Gulf countries. Economies of the Gulf countries continue to hinge onthe oil prices and production, as the crude has remained accounting to 58percent of the region exports and more than 60 percent of the governments'income -- higher by 35 percent of the national product.
Common worry
Elaboratingfurther, Ibrahim believes that instability and security concerns remain acommon worry for the Arab countries, opining that development schemes have beenimplemented at a slow pace. Likewise, the case with the income diversificationstrategies, in addition to a chain of other factors, namely decline ofscientific research, education, human development, low productivity, weakproduction and exportation in the non-oil sectors. As to Dhaman's activities,Al-Ibrahim 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$11.2 billion since 2011, at an annual rate of $1.4 billion, some 60 percent ofthe accumulated assets since its establishment in 1974 -- worth $18.6 billion,25 percent of which for insuring investments and 75 percent as exports'credits. It has paid compensations estimated at $175 million for exporters andentrepreneurs as well as Arab banks. Dhaman was founded in 1974 as an Arabauthority, owned by Arab governments and four financial authoritiesheadquartered in Kuwait. It encourages Arab and foreign investments in the Arabcountries by insurance coverage against non-commercial hazards for investors,Arab and foreign financiers. - KUNA