Kuwait private sector struggling, warns NBK
National Bank of Kuwait (NBK) says that rapid privatisation is needed to arrest the decline in the private sector's share of Kuwaiti GDP.
At a time when policy makers across the Gulf are talking of diversifying economies in order to reduce dependency on oil, Kuwait is going in the wrong direction. National Bank of Kuwait (NBK), in its latest weekly economic brief, reports that the private sector’s contribution to the country’s GDP continued to decline in 2000.
According to the bank, new Ministry of Planning (MOP) figures show that private sector GDP was KD3.1 billion in 2000. That translated into 26% of GDP, down from 31% in 1994 and 42% in 1982.
Further bad news is that although the figure of KD3.1 billion was 4.4% up on 1999 in monetary terms, private sector growth is slowing. Year on year private sector growth was a much higher 6.1% in 1998 and 5.9% in 1999.
According to National Bank of Kuwait’s report, “These statistics underscore the importance and urgency of privatization. Continued delays in approving the necessary reforms and legislation as the pros and cons of privatization are being debated will make the challenge ever more daunting.”