Kuwait is seeking to intensify efforts to achieve a quantum leap in economic structure, within the framework of a strategic vision to develop the national economy, Minister of Finance Anas Khaled Al-Saleh said on Tuesday.
Addressing the opening session of the sixth annual Euromoney Kuwait Conference which kicked off here today with the participation of senior officials, experts and businessmen, Al-Saleh added that the major gathering comes at a time of sweeping several changes and developments that create a financial and economic environment forcing decision makers to be as alert as ever when responding to it.
Cautious optimism regarding the future trends of the world's economic performance is dominant at present, with the emergence of initial signs the performance is improving, the Minister said referring to the latest estimates by the International Monetary Fund (IMF) which revealed limited improvement in economic growth.
Al-Saleh thus expected some deceleration in economic growth in emerging and developing economies this year, but they will improve next year. The Minister also expected the world economic growth to hit 3.2 percent this year, compared to 3.2 percent in 2013.
As for the GCC economies, Al-Saleh predicted they will achieve moderate growth, with improvement in the non-petroleum sectors, considering the geo-political factors in the Middle East.
On the local economy, the Finance Minister referred to data revealing the continuation of improvement in some non-petroleum sectors, whose share of the GDP hit 10 percent in 2013, which led the overall GDP to reach 2.3 percent last year.
According Minister Al-Saleh, the government has been keen on providing basic services, health education, public utilities and developing the infrastructure, which augmented the role of official spending as a locomotive of economy.
He also pointed to the limited role by the private business in economic activities, owing to the sector's reliance on the official projects. Moreover, the majority of the national labor seeks jobs in the government apparatus, adding more burden on the public funds, which is aggravated by the annual financial support offered by the government.
These characteristics of the national economy force us to work o varying its structure, enhancing the role of the private sector in economic activities, in line with the strategic targets of development.
The Minister also referred to sweeping changes on the regional and international levels, and their implications on the oil markets in particular.
He said that the world agencies had granted Kuwait high ratings, the highest on the GCC level. On the arrangements to counter challenges facing the Kuwaiti economy, Al-Saleh told gathering that the economic findings create a need to direct the financial policies to take executive measures likely to vary the national economy, besides fostering the role by the private sector to push forward the wheel of sustainable economic growth.
These policies will also have to consider opening more room for the rates of rising national labor, the minister said, adding that liberating the economic activities from bureaucracy is of high importance to such strategic vision, together with developing legislations relevant to economic activities.
He stated that reform will have to go into two parallel directions; the first focusing on promoting economic administration to support the private sector, while the second will target boosting efforts for financial reform, in addition to increasing the flexibility of the public budget, regarding both revenues and expenditure. This can be realized through increasing non-petroleum revenues and curbing spending, he concluded.