Government and public sector's response to COVID-19 in Kuwait

Our late Amir HH Sheikh Sabah al-Ahmad al-Jaber al-Sabah had a vision for Kuwait established through New Kuwait 2035. He once said this project aims 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 identify, and achieves human resource development as well as balanced development, providing adequate infrastructure, advanced legislation and inspiring business environment”.

Based on seven pillars, New Kuwait 2035 is en route to achieving a sustainable development plan for the future of the nation that will heavily rely on the private sector, particularly on SMEs currently representing 90% of the private companies in the country.

Kuwait's Government firmly understands the private sector's significance and vital participation in its economic sustainability. After the stock market collapsed in the 80s, the Government came to its rescue to prevent long-lasting adverse consequences. During the 2007-08 world economic crisis, the public sector ensured maintaining relative stability by assisting private companies. Amid this pandemic, the logic must remain the same. The Government must maintain the Vision 2035's course by assisting the SMEs that have enormously suffered since most of them were operating with minimal cash reserves.

A bill presented to the National Assembly and allowing local banks to grant loans to SMEs up to KWD 250,000 payable within five years has been approved. This is a step in the right direction. However, the SME ecosystem needs to be revised to make administrative processes more efficient and accelerate the growth and development of these companies generating 3% of the GDP.

Without a robust and thriving SME network, Kuwait could experience severe turbulence that could jeopardize the accomplishment of Vision 2035 and the early recovery of the national economy.