Foreign direct investment in Kuwait

Foreign direct investment in Kuwait

Foreign direct investment is known as a type of international investment in which the direct investor, an entity residing in a particular economy, aims to achieve a permanent interest in an institution residing in another economy. This interest includes a long-term relationship between the direct investor and the institution, in addition to the direct investor’s degree of A large amount of influence in the management of the institution, and foreign investment is one of the main driving forces of the comprehensive economy, and constitutes a prominent factor that contributes significantly to the process of economic development in any country. Foreign direct investment is a real addition to the gross product, unlike indirect foreign investment, which only seeks to make profit without adding real value to the national economy.

Foreign investments play an essential role in promoting global trade, as they open new markets for commercial enterprises and contribute to directing their products for sale. These investments also contribute to stimulating technology and facilitating low-cost production processes. All countries compete to attract foreign direct investment, whether they are considered developed or developing, due to its effective contribution to achieving targeted growth rates, through its positive role in bridging the gap between domestic savings and achieving the desired economic goals.
Despite the many reforms undertaken by the State of Kuwait to attract investments, it still faces challenges in achieving the desired results.

Recently, Kuwait was able to attract new investments worth about 106 million dinars ($347 million) through 8 new partnerships, compared to 163 million dinars ($530 million) in the previous fiscal year, but foreign direct investments in Kuwait remain weak. The value of foreign direct investment inflows to Kuwait decreased by approximately 35% during the fiscal year ending in March 2022, compared to the previous fiscal year. The following table shows the foreign direct investment index in Kuwait (as net inflows) as a percentage of GDP during the period (2016-2020). ):