American Business Council – AmCham Kuwait hosted Dr. Khaled Al Mahdi, Secretary-General of the General Secretariat of the Kuwait Supreme Council for Planning & Development as he discussed Kuwait Vision 2035 launched by His Highness the Amir Sheikh Sabah Al Ahmed Al Jaber Al Sabah to transform Kuwait into an international hub for business and commerce.
Held at the Four Seasons Hotel in Burj Alshaya, the event attracted executives from across the different public and private sectors in Kuwait, and both Kuwaiti and US companies as well as ambassadors and representatives from the government.
In his opening remarks, Frank Belonus, Chairman of AmCham Kuwait focused on the work of AmCham which is centered in US trade and investments in Kuwait and the United States.
Belonus spoke of a collective voice in business advocacy, interdependence, and knowledge sharing. He spoke of investing in Kuwait and its success. “To be successful in Kuwait is to partner with Kuwait,” said Belonus. “And for that, we need to understand where Kuwait is today and work towards the future. We need to understand the Vision because we all will play a key role in that development and success.”
In his most informative speech, Dr. Mahdi gave an overview of the New Kuwait 2035 Vision and outlined the Kuwait National Development Plan. The Secretary-General of Kuwait’s Supreme Council for Planning and Development, Dr. Khaled Mahdi is a member of several high-level government boards and committees including the Public Authority for Industries, the Kuwait Institute for Scientific Researches, and the National Fund for SME among many others.
Dr. Mahdi steers Kuwait’s medium and long-term development efforts towards achieving the States Vision ‘New Kuwait 2035’ and chairs the national SDGs 2010 permanent standing committee.
In 2016, he established the Kuwait Public Policy Centre (KPPC) and its Nudge Unit, which reports directly to him. Dr Mahdi also oversees three other in-house research centers including The National Knowledge- Economy Centre, the National Sustainable Development Observatory, and the National Development Research Centre.
Oil has been the ‘elixir of life for many economies in the Arabian Gulf. Kuwait is no exception. Oil wealth helped top transform Kuwait from a trading, fishing, and pearl diving nation to a highly developed although non-diverse economy. Kuwait’s economy is inexorably tied to oil accounting for nearly half of Kuwait’s present GDP.
In 2015- 2016, volatility in oil prices gave the oil-based economies a rude setback. It was time to take stock; it was time to plan ahead and diversify the economy. Kuwait Vision 2035 laid the road map for transforming Kuwait into a regional financial and commercial hub. Dr. Khaled Al Mahdi is a spontaneous and involved speaker who does not hold back when he speaks. He is forthright, factual, direct, and hopeful, and his talks are always laced with tongue-in-cheek humor.
A man with a wealth of experience in the public and private sectors and academia, Dr. Mahdi spoke of the challenges in getting all three sectors to speak a common language that is mutually comprehensible and stressed on the importance of proper design for any plan to succeed. “An engineer by training, I believe that proper design can lead to proper implementation.” He spoke of the challenges associated with planning. “Articulating plans is not easy. When I began working, I did not see many proper plans being translated into implementation. One of the major issues I found when it comes to national planning is mistrust in government. The presumption, a fixed mindset is an issue – I see it every day.” He spoke of hope and the need for practical strategies. “If we lose hope, we lose our future. We have to be practical about our future.
We have crossed the survival stage and reached a sustainable level, but to sustain this further, we need to take certain steps And this move is not easy,” he warns. Understanding the past is imperative for planning Dr. Khaled Mahdi touched on certain elements of Kuwait’s past that lend to a better understanding of the trajectory in which the country is headed. He spoke of how the geographical location of the country aided in its economic growth and development of a national character.
“There is tremendous opportunity arising only from its geographical location. The location of Kuwait connects two important natural resources – the desert and the sea. People who can survive in this area have to be tough and resilient.” He spoke of Social, Institutional, National, and Geographical capital that was drawn on to formulate Kuwait Vision 2035. Speaking of Institutional capital which includes the democratic structure and civil law society, he said, “We do keep complaining of how slow the system is but deep inside we know it is strong and legal. It has its pros and cons.
We have four types of capital at our disposal that can be used but at the same time, we have to realize that it is not easy, because Kuwait is a city-state. We are villagers and we all know that to change the mindsets of villagers you need ages. Change is doable but not easy with all the entanglements of the different capitals despite political will.” He spoke of the difficulty of doing business in Kuwait. “Doing business is not easy in Kuwait. Abracadabra does not work in an entangled system.”
He went on to discuss the development of Kuwait’s economic and business landscape over the years and how old Kuwait was a trading port dominated by the private sector as opposed to current Kuwait which is dependent on oil exports and the public sector, and the key challenges that need to be addressed soon to ensure a bright and prosperous future. “We derive our power from the past,” he said. “In the old way of doing business, the private sector led the way. It was a sustainable model but the GDP was very low. Today we have the seventh-highest GDP in the world. After the discovery of oil, the public sector began to expand, the private sector started to shrink and Kuwait’s productivity in the labor market went down.” He spoke of the welfare system becoming a burden on the government.
“We were using a natural resource but not introducing reforms. We had a successful sustainable formula in the past made up of a huge private sector, a small public sector, and a productive labor market. But today, although we have wealth at our disposal and a golden opportunity to bring about change, reaching a sustainable, prosperous future is a challenge.” Change is not easy.
“A person in government enjoys a lot of power, and you want to shrink that. Do you think he will take it lightly? He will resist. It is a cultural change we are talking about.” Dr. Mahdi spoke of a need for comprehensive and wide-ranging reform to give Kuwait Vision 2035 a successful outcome.
“We need a cultural change which includes educational reform, labor market reform, mindset reform and there are two ways of doing it – by radically changing everything or by gradually evolving. We need to move both the private and public sectors from their comfort zone.”
Dr. Mahdi discussed the five overreaching national policies that the Kuwait Vision 2035 includes: Economy, Government, Education, Labor Market, and Social Safety. He then elaborated on the importance of each key factor in a cyclical economy and highlighted the role of SMEs, foreign direct investment, public-private partnership, and privatization.
Kuwait Vision 2035 aims at increasing the participation of Kuwaitis in the labor force by 40%. By 2035, 230,000 Kuwaitis need to work in the private sector as compared to 74,000 Kuwaitis as of today. Dr. Mahdi spoke of the seven pillars of the Kuwait Vision 2035 and highlighted Kuwait’s aim at reaching the top 35% position on KPIs across all of them. “I am proud to say that we are the only country where the government has no power over KPIs or GCIs.
