The Future of the Kuwaiti Economy

Source: VoiceAmerica

“Kuwait is one of the richest countries in the world, and the situation looks pretty rosy these days for one reason—which is high oil prices,” said Carnegie's Carole Nakhle on VoiceAmerica’s “Emerging and Frontier Markets Investing” with host Gavin Graham.

Even though Kuwait is producing an average of 2.8 to three million barrels a day, Nakhle said that the situation is also worrisome: “You have eighty percent of government revenue coming from the oil sector. So, there are no other sectors in the economy to compensate for any potential decline in oil price. That would be a key concern for the sustainability of the Kuwaiti economy.”

Discussing foreign investment, Nakhle said that Project Kuwait, a project put in place in the mid-1990s that required oil companies to be involved in the upstream sector without really owning the production had been “nearly forgotten,” because the Kuwaitis “didn’t want the foreign investors—not even to have control over operational management.”

Nakhle added that if there is a potential deal in Iran, it would be interesting to find out “what kind of agreements or contracts Iran would offer to investors and whether Kuwait would learn from what its neighbor will be doing.” 

This interview was broadcasted on VoiceAmerica’s “Emerging and Frontier Markets Investing.”