OPENING the Kuwait Investment Authority (KIA) office in Saudi Arabia is a brilliant and important step, because the trend towards the Gulf region has become an urgent necessity at this sensitive stage globally, considering the economic environment in all Gulf countries is similar in terms of content.
In addition, Kuwait has no large strategic space internally to enable it to exploit all of its financial resources; although a part of that money must be invested in huge productive projects, which help in achieving economic stability and increasing national output, and are complementary with the rest of the neighboring countries.
Hence, a Gulf orientation is necessary, especially since some countries like Saudi Arabia and the United Arab Emirates (UAE) have a big investment base.
The Kingdom of Saudi Arabia has entered into partnerships with big international companies -- whether in manufacturing aircraft parts, military equipment or electric cars. It is also witnessing an agricultural renaissance in its quest for food self-sufficiency.
Therefore, it is important to invest in this active environment, particularly at the start of the implementation of NEOM projects, which are considered among of the largest investment opportunities in the world with significant revenues.
Also, the UAE, Oman, Bahrain and Qatar have immense development plans; hence, they need a lot of foreign investments.
Consequently, establishing partnerships with these countries helps circulate money in the right place; particularly since the major international crises that the world witnessed in the past five decades have cast a negative shadow on Gulf wealth. This is due to the fact that the Gulf is dependent on oil. It has suffered enormous losses, prompting some of them to diversify their sources of income in the safest environment – the local market.
Since the early 1970s, experience has proven that internal investments are the best way to protect the wealth of countries, specifically the developing nations. However, Kuwait did take this step throughout the past decades.
This affected its investment strength, because it relied on international stocks and the revenues obtained from high-risk investments. As a result, it incurred huge losses in the global financial crisis in 2008.
Today, there are many opportunities in some Gulf countries. Investment in the Omani Duqm Refinery has proven to be a success. The Sultanate of Oman has many important projects and their opportunities are worthy of attention. It also signed with many international companies to start implementing the project. Without a doubt, there is a need to expand partnerships with other Gulf countries.
Likewise, Bahrain has laid down huge and plausible development plans; while the UAE is the second largest Gulf economy after the Kingdom of Saudi Arabia.
All of these projects can enhance industries, food security and transportation. Today, the Gulf train project is being proposed, starting from Bahrain going towards Qatar. This is in addition to building a bridge linking them, to be the starting point towards other countries.
As a result, there are many benefits of Gulf investment in the Gulf Cooperation Council (GCC) countries, especially the ease of movement of citizens and goods between these countries, as well as their similarity in social culture. Moreover, it is an environment that does not suffer from corruption, as the case with foreign investments, because it has tight control.
Since the establishment of the GCC, economic integration has been one of its primary goals; but member states have delayed implementing the agreements.
But today, with the regional and global developments, it has begun to strive in this field. It is an opportunity for Kuwait to open KIA offices in the capitals of the remaining four countries. It should go to the Gulf, because it is the best environment for safe investments. Perhaps, the opening of the office in Riyadh is the first step of a thousand miles.
By Ahmed Al-Jarallah
Editor-in-Chief, the Arab Times
