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Kuwait lags on development despite oil wealth

Kuwaiti plans for major infrastructure and development projects have failed to get off the ground, despite consecutive budget surpluses.
Sand covers the empty infrastructure at an abandoned housing project in Khairan, southern Kuwait March 6, 2014. With a youthful, well-educated population, strong relationships with both neighbours and world powers, and a strategic location on the Gulf, major oil producer Kuwait should be as dynamic a hub for the region as Dubai or Doha. But while others in the Gulf have powered ahead, attracting foreign investment and developing infrastructure, Kuwait has stagnated, frustrating the people of a country once

After years of economic stagnation and political infighting, optimism in Kuwait is on the rise. Local economists expect an uptick in government spending — tied to a partial resolution of the political turmoil — and a pickup in the pace of mega-development project implementation. But behind the spending spree, royal infighting, fears about longer term budget constraints and an upcoming succession might derail Kuwait’s turnaround before it even gets started.

“The Kuwaiti economy, in our view, will witness a moderate acceleration in non-oil growth toward 4-4.5% in 2014 and 2015 … driven largely by a faster pace of project implementation, which is already taking place,” Nemr Kanafani, senior economist with National Bank of Kuwait, told Al-Monitor.

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