KUWAIT - Economy
Director General, the Kuwait Fund for Development
A graduate in economics, Abdulwahab A. Al Bader has significant experience at the Fund, having worked as an Economist, Director of Operations, Deputy Director-General of Operations, Deputy Director-General, and Director-General. He also sits on a number of boards, including the Arab Planning Institute, and acts as governor for several organizations, including for The World Bank for Kuwait.
We target not just specific sectors, but rather the desired projects of different countries. Depending on the country we are investing in, we might have certain overall sector preferences that stand out such as social, education, or basic natural resources, like water. If those sectors are within the preferred project rubric, they receive additional lending attention. The respective national priority is the primary consideration, as well as the economic benefit of the specific developments in that country. Recent projects have ranged from schools to electricity and drinking water for cities like Havana, Cuba. And besides Cuba, we have supported numerous projects in Uzbekistan, China, Egypt, and Lebanon; the number had totaled 13 by March 2015, which is typically a busy month for us.
Normally when we receive a request, we consider it based on available infrastructure taking into account the project status when we analyze the technical information. We receive initial board approval in conjunction with studies provided, and following an appraisal we are then able to issue a grant. The process varies depending on the project, and countries do not always deliver fully prepared studies. Most projects require a complete financing plan, and most countries are still in the midst of this process when they first present to us.
Our involvement locally is mainly through institutions we have in Kuwait. We are giving 25% of our yearly net profit to the housing authorities and have created a program to train newly graduated engineers to help keep them working in the country.
Kuwait is always keen to assist other countries in achieving environmental stability. When Kuwait gained independence, it wanted to promote aid, which is still a fairly new idea in the world. Aid was a part of our makeup in the early 1950’s with the establishment of the Gulf Authority, which built schools and hospitals in gulf countries, in such places as Dubai, Sharjah, Yemen, and Oman, as well as establishing hospitals and housing projects in Africa. That authority worked on grants, and the Kuwait Fund was established in parallel fashion for lending to mega projects. The concept of aid took root well before our own development. Kuwait has continued to be a stabilizing country for the international community, and the UN recently recognized its aid program for Yemen and the Syrian situation.
Most of our regional partnerships have been established since the 1970s, when Arab collaboration began in earnest. We enjoy close cooperation with virtually all parties in the region. In terms of directorship, we meet every three years at which point we discuss related issues and the status of programs undertaken together.
Normally in any project, the key challenge lies in procurement. And because regulations may differ, we need to prepare for any potential outcomes. Agreeing on specific procurement can be a challenge at times, but it is our necessary priority to agree on financing plans. At the moment we are collaboratively working on what we call parallel financing, in which we work with different partners on the varying aspects of financing one project. Some of the projects have specific regulations and are required to have local financiers or contractors.
At this moment, we do not have a specific formula for allocation as much as an occasional commitment to a specific disaster or situation. In general, our allocations are mandated in Arab countries; Arab countries must account for no less than 50% of our commitment. We work to fulfill that as well as allocate funds for other countries, dividing contracts based on need.
We like to consider every project a success story, though the rate of success is always evidenced by seeing firsthand the before and after. This is of course very difficult with some 800 projects. I, however, have seen many projects from start to finish, and it is always rewarding. We were especially encouraged by an irrigation project funded in China due to the people’s tremendous reaction upon its completion. Our tendency is to fund large projects with overall economic impact rather than a focus on an individual group. There is still nothing more rewarding than, for example, seeing a hydroelectric dam provide much needed water to a community of people.
The framework has been established such that the Kuwait Fund can exist long into the future. Over the years we have faced many obstacles. Through organizing a way to get things done even when circumstances were less than ideal, we have been able to weather difficult times. We moved through a period in the mid 1980s when the price of oil fell, during which time we were heavily dependent on the government. Since then our cash flow has been steady, and we are often called on for services because we have the funds to allocate.
At this very point, that is exactly what we were created for: to be a development aid for institutions. Certainly we should be perceived as a partner in development. We are working in 104 countries around the world and cooperating with even more.
We are working on plans for a specific program, and given that there are currently no obstacles, we hope to make progress on that. By 2016 we hope that conflict in Yemen will have come to an end. We have certain programs currently under consideration on behalf of the government whereby we could help fulfill a number of Yemen’s governmental obligations.
© The Business Year – June 2015
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