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Kuwait Vision 2035

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Kuwait vision 2035 also known as New Kuwait or The Kuwait National Development Plan (in Arabic:رؤية الكويت 2035  or كويت جديدة) is a long-term national development plan. The aim of the plan is to reduce Kuwait reliance on oil revenues, focusing on diversification, renewable energy and growth. Through the plan the state seeks to attract foreign investors, and strengthen the public and private sector under government control.[1][2].

The development plan was announced on the 30th of January 2017. Formally, it is based on the visions of His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah[1]. The plan is the second 2035 development plan that has been announced for Kuwait. In 2010, the former Prime Minister Nasser Mohammed al-Sabah announced the first 2035 vision plan for Kuwait. This first plan was surrounded by controversies caused by the public funds spent on consultancy services provided by Tony Blair association, the consultancy firm of former British PM Tony Blair. When the Kuwaiti Prime Minister stepped back in 2011, the plan was officially shelved[3].


Placed on the tip of the Persian Gulf Kuwait borders Iraq in the North, Saudi Arabia in the West and the South, and the Persian Gulf to the East. Kuwait is located on the Arabia Peninsula and has a hyper-arid Desert climate[4]. The New Kuwait National Development plan officially seeks a unified approach in its development investments. It is organised around seven pillars and five strategic directions, and includes 164 concrete projects and initiatives.

The seven pillars:[edit]

1.Global positioning: Enhancing Kuwait’s regional and global presence in spheres such as diplomacy, trade, culture and philanthropy.

2. Developed infrastructure: develop and modernize the national infrastructure to improve the quality of life for all citizens.

3. Creative human capital: Reform the education system to better prepare youth to become competitive and productive members of the workforce.

4. Effective public administration: Reform administrative and bureaucratic practices to reinforce transparency, accountability, and efficiency in the government.

5. High quality health care: Improve service quality in the public healthcare system and develop national capabilities at a reasonable cost.

6. Sustainable diversified economy: Develop a prosperous and diversified economy to reduce the country’s dependence on oil export revenues.

7. Improve living conditions: Ensure the availability of living accommodation through environmentally  sound resources and tactics.

The five strategic directions:[edit]

1.     Citizen participation and respect of law

2.     Effective government

3.     Prosperous economy

4.     Nurturing nation

5.     Globally relevant player[2].

Economic diversification and development[edit]

Kuwait is a high- income country highly dependent on oil revenues from exports. Economies reliant on exports of primary products have often experienced volatility in export incomes and long-run deterioration in terms of trade[5]. Deteriorating terms of trade means getting less imports for the same amount of exported goods . It is a major concern to most Middle Eastern countries and GCC countries to become less dependent on primary product exports, most notably exports of oils products. This is reflected in the national development plans,launched in recent years by many countries in the Arabian Gulf (see for example the UAE vision 2021, Qatar National Vision 2030 and the Saudi Vision 2030. This is also the case in Kuwait. One of the key policy objectives for Kuwait national development plan therefore is to diversify the economy, not only to become less dependent on oil product exports, but also because economic diversification is key to long-run sustainabl socio-economic development [6]. IIn the words of Sheikh Sabah al-Ahmad al-Jaber al-Sabah, the aim of the development plan is to “transform Kuwait into a financial and trade hub, attractive to investors, where the private sector leads the economy, creating competition and promoting production efficiency, under the umbrella of enabling government institutions, which accentuates values, safeguards social identity, and achieves human resource development as well as balanced development, providing adequate infrastructure, advanced legislation and inspiring business environment”[1][2].

Kuwait's oil rent dependency[edit]

In 2010 Kuwait was the country with the highest per capita oil rents in the Middle East. Oil rents per capita iin Kuwait amounted to almost 22 thousand USD as compared to Qatar’s [7]11 thousand USD, the country with the second highest per capita oil rents [7]. Kuwait also has the second largest oil refining capacity in the Middle East, after Saudi Arabia [8]. However, Kuwait has not chosen to invest in domestic downstream diversification into petrochemicals despite its comparative advantages. Other countries in the Gulf, such as neighbouring Saudi Arabia, have chosen to invest in diversification with its investment in the Petrochemical industry [9].

As is showed in graph 2.1, the economy in Kuwait is highly dependent on oil rents. The graph also shows the high correlation between these oil rents and the world market price on crude oil. While less obvious, the graph also reveals slightly less oil dependence during the end of the displayed period. Which means that the correlation between the prise on crude oil and oil rents correlate with BNP.

File:Skärmavbild 2019-06-04 kl. 16.19.21.png
Source: World Bank, development indicators and commodity markets.

Graph 2.1, Kuwait's Oil Rent dependency and crude oil prices as part of GDP  

Kuwait's rents on foreign investments[edit]

Kuwait's development plan states attracting investors as one of its key objectives. In the past, however, Kuwait has had no need to import capital [1][2][10][11]. Kuwait has high levels of gross savings, especially compared to the level of fixed capital formation. Kuwaiti domestic savings corresponded to 59% of GDP, while only about 14% ofGDP was spent on fixed capital formation in 2011[11][10][12]. This has allowed Kuwait to accumulate large amounts of foreign assets [13]. Kuwait has not attempted to attract foreign direct investment but had been able to rely on domestic savings. Capital export, on the other hand, has been and continues to be very important for the Kuwaiti economy (see Kuwait Investment Authority). In 2010, capital outflows corresponded to 8 percent of GDP [14]. Kuwait’s sovereign wealth fund is managed by the Kuwait Investment Authority (KIA) and is the oldest sovereign wealth fund in the world, established in 1953 and one of the world’s five largest[15]. Kuwait is in a position to earn significant returns on the investments managed by KIA, with the possibility to reduce its dependency on oil rents [16]. Therefore, the Kuwaiti economic diversification that has taken place has, to date, been due to increasing returns from its foreign investments, rather than significant changes in importance between different sectors of its economy. The added value generated from different sectors of the economy remained almost at the same percentage share in 2000 as in 1970 [17].Which meant that Kuwait did not make any significant structural changes in this period.

Graph 2.2 shows the very high levels of domestic savings in Kuwait. It also shows that Kuwaiti domestic savings were much higher than its investments in domestic fixed capital during the period displayed.  An exception was during a short period in the aftermath of the Gulf War when war-related costs and a decline in oil prices had great negative effects on Kuwaiti economy, as well as on its saving levels. At the time, there was of course also a need for investments in rebuilding damaged infrastructure[18].

File:Skärmavbild 2019-06-04 kl. 21.02.20.png
Source: World Bank, development indicators.

Graph 2.2, Kuwait’s gross savings and capital formation in relation to its GDP

Kuwait's private sector and business environment[edit]

One of the focus areas in Kuwait’s national development plan is to strengthen the public sector and to privatize state-owned companies, as well as to improve the overall business climate[1][2]. To this date, the Kuwaiti private sector has been considered underdeveloped and has been described as rather dualistic [19]. Comprised of either large capital intensive industries providing few employment opportunities, or small and lowproductive, labour intensive business activities. The latter most often dependent on low cost foreign labour. Neither the capital intensive nor the labour intensive sectors have been able to produce enough innovations and skill-based growth, or sufficient qualified work opportunities for Kuwait’s native citizens[19]. In 2010, almost 84 percent of the Kuwait labour force was comprised of expatriates[19].

The new Kuwaiti national development plan also comprises legal reforms in the economic sector and efforts to simplify the regulatory environment for businesses, as well as reforms aimed at modernizing the education system in order to reduce Kuwait’s reliance on the expatriate workforce. The World Bank has ranked Kuwait’s “Ease of doing business” as 97th in the world, which means that it has a lower ranking than for example Kenya (ranked 61), Colombia (ranked 65) and Uzbekistan (ranked 76)[20]. It also means that Kuwait has lost ground since 2012, when it was ranked as number 67[21]. The Gulf Cooperation Council (GCC) has accomplished some success in the economic field, and has been able to improve the business environment within the region. Labour, as well as capital, is allowed to move freely within the GCC[21].

Citizen participation, rule of law and institutional environment[edit]

Kuwait’s national development plan does not only concern itself with purely economic matters. The five strategic areas of the New Kuwait plan also include “citizen participation and respect of law”, as well as “effective government”.

Kuwait has been labelled a “semi-democracy” and fulfils some of the criteria for a constitutional monarchy. Freedom House classifies Kuwait as “partly free”[22]. In this regard, Kuwait stands out from other GCC countries, which has led some to speak of “Kuwaiti exceptionalism”[23]. Kuwait’s government is appointed by the country’s hereditary rulers, the Sabah family; however, the constitution and the parliament do exert certain constraints on the executive branch. The parliament is popularly elected and has the power to veto government decisions, while its power to propose legislation is limited. It thus functions as an oppositional force to the ruling family. Established in 1963, the Kuwaiti parliament is the oldest and arguably the most influential parliament in the Arab Gulf. It has been argued that the singularity of Kuwaiti politics can be traced back to historical factors, such as the particular dynamic between the ruling Sabah family and the influential merchant class, as well as the interaction between formal politics and the informal consultative institutions of tribal civil society, such as the diwaniyyat [24].

Kuwait’s political system has been held forth by some as a model for how democracy could function in the Arab Gulf. Others, more sceptical about the potential of democracy in the region, instead point to how Kuwait’s parliamentary politics has impeded economic development, pointing to how other, less democratic GCC countries such has Qatar and the UAE has outperformed Kuwait economically. Parliamentary veto has been blamed for hindering government-initiated development projects and foreign investment. Furthermore, the ruler of Kuwait has repeatedly resorted to dissolving the parliament in the absence of a mechanism to settle disagreements between the executive and the legislative branches, which has led to political stalemate and disarray. It has also been discussed how meaningful it is to speak of democracy in a state where most residents are non-nationals and therefore lack suffrage[25]. Apart from the large expatriate population, a substantial, stateless Bidun population resides in Kuwait (105,702 persons). The Bidun are a group of residents who are born and raised in Kuwait, but for various reasons have failed to obtain citizenship. Formal political parties are prohibited in Kuwait, while other forms of associations and professional unions are allowed, within certain confines[26]. Freedom of expression is suppressed. Revoking citizenship is used by the Kuwaiti state as a tool for penalizing dissent and criticism.

The judiciary in Kuwait cannot be considered independent from the executive branch. Judges are appointed by the emir, and courts tend to rule in the government’s favour. (Freedom House). In the last years, a number of controversial legal cases including foreign investors have received media attention. A recent example includes successful Russian businesswoman Maria Lazareva, who was convicted to a ten year prison sentence for ‘misuse of public funds’ in a case that has been criticized for its lack of transparency and due process[27]. Kuwait subsequently ignored an arbitration request by Russia, thus violating the terms of a bilateral agreement between Russia and Kuwait aimed at facilitating investment. The Lazareva case is not the only one of its kind; Kuwait has ignored arbitration requests from foreign investors in the past, failing to comply with bilateral investment treaties[28]. The corruption and arbitrariness of the Kuwaiti judiciary system thus risks to discourage much needed foreign investment, crucial for attaining the goals set out in the New Kuwait vision.

Sustainable environment[edit]

Oil was discovered in Kuwait in the 1930’s. During the 1950s and 1960s it became one of the world’s largest oil exporters[29]. Having the sixth largest proven oil reserves in the world and being one of the largest exporters of oil, makes Kuwait heavily dependent on its oil. 90-95 % of Kuwait’s export consists of oil. Oil makes up 80% of its revenues and 40 % of its GDP. In comparison, Kuwait’s gas resources are not considered significant in a global perspective[30]. After its independence, the new state nationalised its oil, establishing the Kuwait oil company. Today, the oil is controlled by Kuwait’s Ministry of Oil and the Kuwait Petroleum Corporation (KPC)[29].

Current uncertainty concerning oil prices, oil demand and the amount of oil reserves makes the country’s economy vulnerable. In 2009 and 2016, Kuwait experienced serious economic deficits after decades of growth. Both in 2010 and 2017, however, Kuwait shifted back to economic surplus[31][32]. In the Kuwait Vision 2035, three projects focus on increasing the production of oil and bio-fuel. The projects focus on building refinery and olefines for oil and bio-fuel. In 2019, two out of three of these projects were almost completed, being among the projects that was completed early[33].

In record time, Kuwait has been able to establish an extensive world-class urban road infrastructure. In 2010, the roads exceeded 6,600 km, and the plan was to expand the paved roads with an additional 700 km. Public buses are available, through both the private and public sector. However, the main means of transportation is private vehicles[34][4]. Through the Kuwait Vision 2035, the state seeks to further develop infrastructure connected to land, water and air. The land transportation is to be expanded with 292 km of new roads, and a bridge over the Kuwait Bay. Three port projects and one harbour project are planned, as well as an expansion of the airport. In general, all the harbour projects had been initiated by 2019. The airport expansion project is based on recommendations from the 2005 Master Plan to modernize the airport. The expansion recommended in 2005 has not yet been initiated. Many of the water and air projects, which should be done by 2022-23, still have not seen any considerable progress in 2019. The state seeks to develop and improve the technological infrastructure for communication. The Vision Plan seeks to develop and increase the capacity of electricity through the construction of a new operational stations, transmission lines and hotlines, develop telephone facilities and services as well as audio networks[35].

The country’s large income from oil has enabled the state to provide its citizens with a higher standard of living. The increased living standards have resulted in major consumption and waste. As a result CO2 emissions are increasing. Since 1990, the CO2 emissions in Kuwait have been increasing rapidly. Today, Kuwait is the fourth largest emitter of CO2 based on List of countries by carbon dioxide emissions. Since 2005, the year of the Kyoto protocol, this growth has been less rapid. CO2 emissions from other sectors, such as industrial process emissions, agriculture and waste, have decreased[36]. In the Kuwait Vison 2035, two projects specifically focus on maintenance of air quality. The Vision also aims to build three stations to overlook and produce knowledge about pollution[37].

Kuwait have a hyper-arid desert climate. During the winter, it rains 16-27 mm and the temperature is around 13 degrees Celsius. In the summer, it rains less than 5 mm and the temperature reaches 38-54 degrees Celsius(NOTE).The total land area of Kuwait is approximately 1782 (1000 ha), of which the agricultural area is 150 (1000 ha) and forest area is 6,25 (1000 ha[38]. Poor soils and harsh climate gives Kuwait an extreme shortage of agricultural land and less than 1% of the country is considered arable. Agriculture consists of almost 0% of Kuwait’s GDP, raising from 0.33 % in 2002 to 0.40 %.  2014[30][39]. For several years, Kuwait has worked to use more land for agriculture, in order to provide food for its population. Limited possibilities for agriculture makes Kuwait rely on imported food. This makes the country vulnerabe to price changes. Increased agriculture will increase the demand for water, making it even more important for Kuwait to rationalise water efficiently, as well as increase the supply[39][30].

Kuwait faces severe water problems. Permanent water resources are scarce in Kuwait, which makes the country highly dependent on Desalination of water, as well as fresh water resources such as rain water. The only natural freshwater resources are located in the northern part of Kuwait, in the vicinity of oil fields. The country’s flat landscape makes it vulnerable to floods. Due to extremely high evaporation and high deficit in soil moisture, very little rain reaches the groundwater supply.  The hyper-arid desert climate leads to increasing drought occurrences. Climate change may increase the length of these droughts and further increase the water problems in the country. In 2011, about half of Kuwait’s water supply came from desalinated water. Kuwaitis’ usage of water is one of the highest in the world per capita[40][41]. The New Kuwait Vision 2035 includes one project focusing on improving and developing water and electricity capacity. The project seeks to increase availability and capacity of desalinated and potable water, as well as water energy[42].One of the plans in the Vision also seeks to complete the Solid Waste Treatment Project, aiming to reduce water consumption in the Kabad area. The project seeks to encourage public-private partnerships, which makes the plan rely not only on corporation of internal actors but also external actors. By 2019, 75% of the Solid Waste Treatment Project was completed. Moreover, the Kuwait Vision 2035 seeks to construct a sanitary landfill site for receiving and sorting waste in Kabad. By 2019, 1% of the project was completed[43]

Kuwait faces several water problems. Permanent water resources are scarce in Kuwait and makes the country highly dependent on Desalination of water and fresh water, such as rain water. Due to extremely high evaporation and the high deficit in soil moisture very little rain reaches the groundwater supply.  In 2011 about half of Kuwait’s water supply came from desalinated water. This means that Kuwait has an extreme shortage of water. Simultaneously Kuwait has the highest usage of water in the world per capita basis. The hyper-arid desert climate furthermore means that the country have recurrent droughts.[40][41].Climate change will have a number of tangible consequences in Kuwait in the future, such as rainfall decline, rising sea levels and higher average temperatures. The physical impacts of climate change will threaten Kuwait’s economic and environmental sustainability[4][31]

Human capital and migrant labour[edit]

Developing Kuwaiti human capital and reforming the education system in order to better prepare Kuwaiti nationals for participation in the workforce is one of the strategic objectives of the New Kuwait plan. Like in all other GCC countries, the number of non-national residing in Kuwait today exceeds that of its citizens. Kuwait is highly dependent on migrant labour for low-paid jobs in e.g. the service and hospitality sectors. Official attempts to increase the percentage of Kuwaiti nationals in the workforce mainly targets white-collar professions such as the banking sector.

Similarly to other GCC countries, Jordan and Lebanon, Kuwait employs the Kafala system, a sponsorship system that regulates the conditions of its foreign worker population and curtails foreign workers’ right to naturalisation or permanent legal status. Migrant domestic workers are not covered by Kuwait’s Labour Law and are vulnerable to abuse by employers[44]. In 2018, a diplomatic crisis erupted between Kuwait and the Philippines, following the discovery of the body of a young Filipina domestic worker, bearing the marks of torture and strangulation. Rodrigo Duterte, the president of the Philippines, officially condemned the situation for Filipino workers in Kuwait, and the Philippine Department of Labour issued a ban to send Filipino workers to Kuwait[45]. The crisis was partly resolved through an agreement granting some additional rights to Filipino domestic workers, leading to the Philippines lifting the ban[46]. The crisis highlighted the imperative for reform in a situation where Kuwait is highly dependent on its low-paid migrant labour.

Women's rights and economic participation[edit]

Kuwait is among the top ranked Arab countries on the Global Gender Gap Index. Women in Kuwait participate in the workforce to a larger extent than in other GCC countries. Around half of the female population in working age participate in the labour market, while they make up the majority of university graduates.[47][48]. While Kuwaiti women are more active in the formal economy than their peers in other GCC countries, they hold relatively few positions of power in formal politics[49]. Kuwaiti women gained suffrage in municipal elections in 2003, and full suffrage and the right to run for parliament in 2005[50][51]. Kuwaiti women cannot marry without their father’s permission and cannot pass on citizenship to their children. Marital rape and domestic violence against women are not criminalized[44]


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