Opportunities seen for U.S. companies to expand in Kuwait

American businesses looking to expand in the Gulf should turn to the fast-growing Kuwait, stakeholders and diplomats recently said.

U.S. exports to the Gulf and North Africa region grew to $71 billion last year, its highest levels ever, David Hamod, president and CEO of the National U.S.-Arab Chamber of Commerce (NUSACC), recently noted. He attributed much of that growth to Kuwait, where exports grew 40 percent between 2013 and 2014.

The country’s economy is driven by oil and gas, defense, infrastructure and consumerism, he said.

“Let me add a fifth driver, which is significantly smaller but in some ways is every bit as important – that’s education and training,” Hamod told the Gulf News Journal.

Kuwait is transitioning from a hydrocarbons-based economy to a knowledge-based one, Hamod said.

That point was later emphasized by Meshaal Jaber Al-Ahmad Al-Sabah, director general of Kuwait Direct Investment Promotion Authority (KDIPA). Al-Sabah, the keynote speaker at a recent NUSACC roundtable in Washington D.C., said his country had long been rich in oil, gas and natural resources; but in recent years, Kuwait has pushed to diversify its economy.

Based on the country’s goal of becoming a financial and transit hub by 2035, the government has created a five-year plan through 2020 that, among other things, aims to increase private sector growth and create jobs for Kuwaitis.

Officials also have worked to update other regulations in order to bring investors to the country, he said, such as the issuing of a new foreign direct investment law and updating its public private partnership laws.

Alok Chugh, a tax partner at Ernst & Young’s Middle East practice in Kuwait who spoke on the roundtable’s panel, said that one of the most important factors of making successful investments in the country was the enforcement of these laws.

“They have set the right framework,” he said.

Al-Sabah noted that KDIPA was created to encourage both local and foreign investment within the country. The authority helps businesses set up offices, engage with government and private sector entities, and to explore possibilities within the country.

“Many investors, they don’t know that much about Kuwait," he said. "They don’t know about investment opportunities in Kuwait."

U.S. Ambassador Douglas Silliman, who has served in Kuwait since last August, emphasized the business potential in the country, a message he has brought to the United States.

Kuwait has been a political and defense partner to the U.S. through the years, but it is also been a steady economic partner, albeit one that does not necessarily get much attention, Silliman said.

Dao Le, senior commercial officer at the U.S. Embassy in Kuwait, said several opportunities for investment already exist in other countries in the Gulf, from Saudi Arabia to Dubai.

But Kuwait has an advantage, he said: “You want to do business with you friends.”