Kuwait will lag neighbours on economic diversification

Significance The resignation highlights that, despite the suspension of parliament in an attempt to overcome the political deadlock arising from executive-legislative tensions, political infighting remains a significant barrier to realising Kuwait’s development plans. These seeks to diversify the hydrocarbon-dependent economy and build the non-oil private sector. Impacts China will be a focus of Kuwait’s attempts to attract FDI, especially in the energy and maritime sectors. Shrinking fiscal revenues, as oil prices fall, will galvanise efforts to transfer infrastructure development to the private sector. Kuwait will copy other Gulf states in offering residency incentives to major international investors and high-skilled professionals. Kuwait’s powerful, politically well-connected mercantile elite will obstruct market liberalisation, slowing economic development strategies.