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KW23_EC_WorldBank_Issam Abousleiman_PORTRAIT

KUWAIT - Economy

Issam Abousleiman

Regional Director, GCC countries, World Bank

Bio

Issam Abousleiman joined the World Bank in 1989 in the loans department and, since then, has held various positions across the institution, including head of financial advisory and banking at the World Bank Treasury and principal investment officer in the banking and debt management department. His most recent assignment was country manager for Colombia in the Latin America and Caribbean region. His regional expertise includes Africa, Asia, Europe, Latin America, and the Middle East regions. Abousleiman is a graduate of the Harvard University Executive Management program and holds an MBA in finance and investment from George Washington University, as well as an MBA in management from the American University of Beirut. He is a certified Financial Analyst (CFA).

"Kuwait’s economy is set to continue recovering from the contraction brought by the pandemic in 2020."
The World Bank has been helping the Kuwaiti government to improve socio-economic conditions, private sector expansion and governance, and developing human capital.
As an organization with macro-expertise of the world’s economy, what is the World Bank’s perspective on the progress of Kuwait?

Kuwait’s economy is set to continue recovering from the contraction brought by the pandemic in 2020. Developments in the oil economy have supported the recovery, with Kuwait’s oil price and production levels increasing by 51.5% and 13.6%, respectively, during the first 10 months of 2022. Oil exports in Kuwait rose by 81% during 1Q2022 (YoY), prompting a 270% widening of the current account surplus, which is estimated to reach 28.5% of GDP during the same period. Economic growth is forecast to accelerate in 2022 to 8.5% before moderating to 2.5% in 2023 and 2024, respectively. After growing by 13.4% in 2022, the oil sector will continue supporting growth as more capacity from the Al Zour refinery comes online in 2023, despite signals of more cautious OPEC+ scheduled production. Likewise, the non-oil sector in Kuwait is anticipated continuing to expand in 2023 following a 7.7% uptick in 2022. More robust demand will be translated into additional upward inflationary pressures, though monetary tightening and decreasing global food prices will moderate inflation in the medium term.

Taking into account Kuwait’s heavy reliance on the oil and gas industry, what solutions could be implemented to increase economic diversification?

Kuwait, like other GCC countries, wishes to diversify its economy away from oil, and indeed, its potential is tremendous. Vision 2035 provides a solid road map; one that can be updated over time; however, significant reforms are needed to realize its objectives. Examining the case of other GCC nations can guide Kuwait to the right policies to diversify the economy—encouraging FDI by ensuring a streamlined and supportive business environment. Neighboring countries are moving ahead with 100% foreign ownership and long-term residency: developing the knowledge economy and moving into high tech areas. GCC countries are looking at what role their sovereign wealth funds can play in supporting growth industries such as the tech sectors and reorienting their education and training systems to meet the demands of tomorrow’s workplace. Finally, rationalizing employment in the public sector and encouraging youngsters and women to embark on exciting careers in the private sector is also important Kuwait is a relatively a small country and can transform itself rapidly within the right policy reform framework.

What is the current scope of the World Bank’s support of the local authorities?

The government of Kuwait and the World Bank have a longstanding partnership built around an increasingly strategic Advisory Services Program begun in the early 1960s. Kuwait has been a strategic partner that has supported developing nations’ progress. One of the first reports delivered in 1961 focused on the state of the Kuwaiti economy. The opening of the World Bank’s Country Office in 2009 expanded the program with the aim of helping the government improve socio-economic conditions, including human capital, private sector development, and governance. The government has defined a clear path for sustainable growth with the Vision 2035/New Kuwait aimed at transforming the country into a regional financial and commercial hub by 2035. The seven pillars of the Vision are expected to be realized through the Third Kuwait National Development Plan (KNDP-3) 2020-2025 and subsequent national development plans. This is now also embodied in the Government Program approved in November 2022. Building on achievements and lessons learned, the World Bank and the government of Kuwait have agreed to a Country Engagement Framework (CEF) for 2021-2025 with the following thematic pillars: enabling the private sector to become the engine of growth and job creation in a diversified economy, investing in human capital as a key factor in wealth formation, enhancing governance and improving the effectiveness of public administration and service delivery, and promoting sustainable infrastructure and a healthy living environment. The CEF is also guided by a Gender Engagement Framework that will support a crosscutting approach to enhancing women’s economic opportunities, and promote an enabling environment for their employment, entrepreneurship, and leadership.

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