An update to the economy

Kuwait

Yousef Al Essa, CEO of Bayan Investment Holding, talks to The Energy Year about challenges and priorities when it comes to developing the Kuwaiti economy. Bayan Investment Holding is a Kuwait-based company engaged in investment and portfolio management activities as well as investment in real estate.

How have Bayan Investment Holding’s activities evolved in recent years?
Bayan Investment Company recently became Bayan Investment Holding Company in 2021. Our focus is on creating value for our investors by implementing a strategy that ensures quality and consistency, regardless of market conditions. The key to a successful strategy is investing in people, as they represent the true value of each investment opportunity.

What are the main challenges to further develop the Kuwaiti economy?
The Kuwaiti economic model still resembles a socialist system, with limited opportunities for the private sector. The government employs 90% of Kuwaiti nationals, negatively impacting the economy’s productivity. To diversify the economy, there is a need to move away from oil and towards sectors crucial to the country’s future, such as education, healthcare and infrastructure. The potential is significant, but more needs to be done in terms of government regulations.
In the mid-80s, Kuwait was second to none in the GCC in terms of infrastructure but now lags behind other regional peers. Even in education, Kuwait was a leader in the 70s, with students from other countries coming to study in its schools. Unfortunately, while other GCC countries have evolved significantly, Kuwait has not. This is due to various systemic reasons, including internal politics and a lack of decision-making. Although recent reforms have been enacted, there is still a long way to go. What is needed is a clear vision and actions based on that plan. Kuwait has the potential to be in a much better position than it is now, but unfortunately lacks the proper recipe.

What measures should be prioritised to accelerate Kuwaiti economic growth?
First, the government bureaucracy must be transformed by embracing technology and digitalisation. The digitalisation of government services is highly beneficial for economic development. In Kuwait, it still takes two to three weeks to obtain a simple paper that can be downloaded on a cell phone in most of the world.
Another key point is to encourage the younger generation by creating an environment that enables them to be more creative and productive.

How attractive is Kuwait’s stock exchange for investors?
The stock market is a reflection of the country and its economy. What is needed is a clear plan and strategy for the country’s direction, as well as more involvement from the private sector in the development process.
Additionally, critical positions in government institutions such as the CMA [Capital Markets Authority] and other organisations should be based solely on the ability to lead, rather than political or social backgrounds. It has been proven that such decisions should not be influenced by factors that could harm the economy.
I believe the Kuwaiti stock market is part of the global market, and to attract investors, major reforms and a serious approach from the government are necessary.

What are your strategic goals for the future?
Our focus is on growth and value creation for our shareholders. The key objective is to diversify as much as possible while ensuring a steady income stream. This will create a solid foundation to build upon and reinforce our already strong financial capabilities.
As we look to the future, our goal is to be leaders in moving Kuwait forward.

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