Like other countries around the world, Kuwait is finding it prudent — given the low-interest global financial environment — to invest in its infrastructure so as to modernize and create jobs.
A recent report reveals that Kuwait plans to spend $15.6 billion on infrastructure this fiscal year on projects like roads, the electric grid, and installations like airports and seaports. Also in the plans are housing and new residential construction, and additional renewable energy projects and
initiatives. Like some neighbors, including Saudi Arabia, Kuwait is evaluating
renewable energies like wind and solar to try to diversify and pivot away from
over-reliance on traditional oil revenues.
The information on Kuwait’s infrastructure program came from Khaled Mahdi, Kuwait’s secretary general of the General Secretariat of the
Supreme Council for Planning and Development, who made the announcement to Al-Anba,
an Arabic daily.
Mahdi said the government will foot the bill for nearly 50 percent of the investments, with approximately 33 percent coming from state-owned oil revenues and 17 percent from the private sector. He described the work as part of a “second five-year plan”
for Kuwait, in which planners also want to boost tourism and financial investments in the
country.
For more on Kuwait’s finances, the Gulf News Journal
spoke with John Angelis, a professor of business at
Elizabethtown College in Elizabethtown, Pennsylvania.
“Kuwait’s investment in infrastructure is wise,” Angelis said. “Economic
data consistently shows that government investment in infrastructure results in
an outcome of double or more return. It’s one of the best ways the
government can stimulate the economy.”
Angelis also said that much of this work should include citizens and local workforces, rather than relying too much on outside
labor.
“It’s important not just to build more infrastructure, but to
employ local workers as well as guest workers and specialists,” Angelis said.
Angelis pointed to infrastructure efforts by
China that might have led to big GDP gains over the last few decades.
Other economists agree on the importance of
infrastructure spending.
“Infrastructure projects — electricity, roads, airports, water systems and telecommunications — are the
foundations of modern economies,” Balaji
Viswanathan, vice president of Product at the robotics firm Invento, said.
“When you put up a power plant,
you not only generate employment directly through construction and operations
at the power plant, but also create an industrial base around the plant who
would want to tap the power,” Viswanathan said. “These industries would
get more entrepreneurs and employ more labor. These workers would purchase more
goods from the markets, creating a virtuous cycle… . When you put a road through
a backward area, you bring them close to employment options, markets and better
healthcare. Infrastructure is the key to wiping (sic) poverty.”
