KUWAIT: Freight trucks trundle down the dusty, potholed roads of Kuwait's busiest port, running into traffic jams as they emerge into the surrounding streets. But after years of inaction, the government is finally moving to ease the congestion.
It is pushing ahead with a $ 2.6 billion plan to build a 36 km (22 mile) causeway, one of the longest in the world, connecting Shuwaikh port and densely populated southern Kuwait with the north of the country, near the Iraqi border.
Such big projects were stalled for years by political wrangling and bureaucratic inertia, leaving Kuwait with underdeveloped infrastructure and low levels of foreign investment in relation to its huge oil wealth.
In the last few months, however, authorities have begun issuing contracts for some of the projects, raising hopes that one of the region's most under-performing economies may finally live up to its potential.
The government signed a contract with South Korea's Hyundai Engineering and Construction Co. in November to design and build the causeway over the next five years. Construction is due to start later this year.
"It is a very strategic project - we have been talking about this since the 1970s," Abdulaziz Alkulaib, undersecretary at the Ministry of Public Works, told Reuters.
Last month, Kuwait signed a deal with a consortium led by France's GDF-Suez, and including Sumitomo Corp. of Japan, to build the Az Zour gas-fired power and seawater treatment plant in Kuwait.
This was seen as a breakthrough because it is the first of Kuwait's major public-private partnerships, in which private firms will help to operate infrastructure. Once running in 2015, the plant is to account for some 12 percent of Kuwait's power generation capacity and a quarter of desalination capacity.
"It has taken a long time for these projects to begin, but this is an encouraging step," said Daniel Kaye, senior manager for economic research at National Bank of Kuwait (NBK).
"It sends a positive signal to businesses and investors that projects are at last moving."
The causeway and Az Zour projects are part of a 30 billion dinar ($107 billion) development plan that aims to diversify the economy and was approved by the ruling emir, Sheikh Sabah Al-Ahmad Al-Sabah, in 2010. The plan also includes a new airport terminal, an oil refinery, a metro system and hospitals.
In the fiscal year 2010/11, the first year of the plan, the government spent only 62 percent of its target on the projects, and it has continued to undershoot targets since then.
One reason is the technical and administrative difficulties of carrying out complex projects through a government which lacks experience, expertise and a reputation for efficiency.
Politics have been an even bigger obstacle. Continual feuding between an elected legislature and the cabinet, chosen by a prime minister who is appointed by Sheikh Sabah, blocked parliamentary approval of development funds and led to a series of cabinet reshuffles which distracted from policymaking.
Last year the country was rocked by large youth- and opposition-led demonstrations demanding political reforms.
In the past few months, however, the environment for economic policy-making has improved. After parliament was dissolved ahead of snap elections on Dec. 1, the government was able to use executive powers to push through a raft of legislative measures and approvals.
Opposition MPs, some of whom had blocked state spending in the past, boycotted the elections. The result was a new 50-seat parliament with a larger number of pro-government legislators and political newcomers, who may be more willing to comply with the cabinet's plans.
Government officials are certainly adopting a considerably more decisive tone.
"This is in the master plan and it is set out by emiri decree. Whatever is in that master plan has to be implemented," Alkulaib said of the causeway project.
Such statements are cheering the stock market, where the main index sank to an eight-year low last November but has since climbed about 12 percent.
The new mood of optimism does not necessarily mean the government will get an easy ride for its projects. Political tensions have not disappeared and street protests have continued since the December elections, presenting the risk that political turmoil could eventually worsen again.
A majority of lawmakers in the new parliament voted last week to form a special committee to probe the process under which the contacts for the causeway and Az Zour were awarded; the committee is expected to reach a conclusion in three months.
NBK's Kaye said it was important not to get carried away about prospects for investment in Kuwait because there were still political, technical and administrative hurdles.
"But we do now detect a greater determination on the part of the authorities to push ahead with key development projects."
Kuwaiti economists say the causeway, which will cut the road distance between the north and south of Kuwait by two-thirds, will help to develop the neglected north of the country, where an urban area called Silk City is planned.
"Urbanization in Kuwait is located in the southern coastal area but there is planned urbanization in the northern region as part of the plan," said Abbas Al-Muqrin, professor of economics at the University of Kuwait.
"The shortcut to gain access to this area will revive the region economically."
Silk City's name recalls the Silk Road, the web of trade routes which linked Europe and Asia centuries ago, and the project is designed to form part of a trade hub near a planned new port, Mubarak Al-Kabeer. Some economists think the port could eventually become a rival to Iraq's Umm Qasr.
Kuwaiti authorities hope Silk City will become home to around 530,000 people, or about 14 percent of the country's current population.
"The causeway will create new chances for people to work there and live there," senior project engineer Mai Ebrahim Al-Mesad said. "It will be a signature for Kuwait."
Kuwait moves ahead on infrastructure after big delays
Kuwait moves ahead on infrastructure after big delays
World must prioritize resilience over disruption, economic experts warn
- Al-Jadaan said that much of the anxiety dominating markets reflected a world that had already been shifting for years
- Pointing to Asia and the Gulf, Al-Jadaan said that some countries had already built models based on diversification and resilience
DAVOS: Saudi Arabia’s Finance Minister Mohammed Al-Jadaan urged policymakers and investors to “mute the noise” and focus on resilience, as global leaders gathered in Davos on Friday against a backdrop of trade tensions, geopolitical uncertainty and rapid technological change.
Speaking on the final day of the World Economic Forum in Davos, Al-Jadaan said that much of the anxiety dominating markets reflected a world that had already been shifting for years.
“We need to define who ‘we’ are in this so-called new world order,” he said, arguing that many emerging economies had been adapting to a more fragmented global system for decades.
Pointing to Asia and the Gulf, Al-Jadaan said that some countries had already built models based on diversification and resilience. In energy markets, he pointed out that the focus should remain on balancing supply and demand in a way that incentivized investment without harming the global economy.
“Our role in OPEC is to stabilize the market,” he said.
His remarks were echoed by Saudi Arabia’s Minister of Economy and Planning Faisal Alibrahim, who said that uncertainty had weighed heavily on growth, investment and geopolitical risk, but that reality had proven more resilient.
“The economy has adjusted and continues to move forward,” Alibrahim said.
Alibrahim warned that pragmatism had become scarce, trust increasingly transactional, and collaboration more fragile. “Stability cannot be quickly built or bought,” he said.
Alibrahim called for a shift away from preserving the status quo towards the practical ingredients that made cooperation work, stressing discipline and long-term thinking even when views diverged.
Quoting Saudi Arabia’s founding King Abdulaziz Al-Saud, he added: “Facing challenges requires strength and confidence, there is no virtue in weakness. We cannot sit idle.”
President of the European Central Bank Christine Lagarde stressed the importance of distinguishing meaningful data from headline noise, saying: “Our duty as central bankers is to separate the signal from the noise. The real numbers are growth numbers not nominal ones.”
Managing Director of the IMF Kristalina Georgieva echoed Lagarde’s sentiments, saying that the world had entered a more “shock prone” environment shaped by technology and geopolitics.
Director General of the World Trade Organization Ngozi Okonjo-Iweala said that the global trade systems currently in place were remarkably resilient, pointing out that 72 percent of global trade continued despite disruptions.
She urged governments and businesses, however, to avoid overreacting.
Okonjo Iweala said that a return to the old order was unlikely, but trade would remain essential. Georgieva agreed, saying global trade would continue, albeit in a different form.
Georgieva warned that AI would accelerate economic transformation at an unprecedented speed. The IMF expects 60 percent of jobs to be affected by AI, either enhanced or displaced, with entry-level roles and middle-class workers facing the greatest pressure.
Lagarde warned that without cooperation, capital and data flows would suffer, undermining productivity and growth.
Al-Jadaan said that power dynamics had always shaped global relations, but dialogue remained essential. “The fact that thousands of leaders came here says something,” he said. “Some things cannot be done alone.”
In another session titled Geopolitical Risks Outlook for 2026, former US Democratic representative Jane Harman said that because of AI, the world was safer in some ways but worse off in others.
“I think AI can make the world riskier if it gets in the wrong hands and is used without guardrails to kill all of us. But AI also has enormous promise. AI may be a development tool that moves the third world ahead faster than our world, which has pretty messy politics,” she said.
American economist Eswar Prasad said that currently the world was in a “doom loop.”
Prasad said that the global economy was stuck in a negative-feedback loop and economics, domestic politics and geopolitics were only bringing out the worst in each other.
“Technology could lead to shared prosperity but what we are seeing is much more concentration of economic and financial power within and between countries, potentially making it a destabilizing force,” he said.
Prasad predicted that AI and tech development would impact growing economies the most. But he said that there was uncertainty about whether these developments would create job opportunities and growth in developing countries.
Professor of international political economy at the University of New South Wales in Australia, Elizabeth Thurbon, said that China was driving a Green Energy transition in a way that should be modeled by the rest of the world.
“The Chinese government is using the Green Energy Transition to boost energy security and is manufacturing its own energy to reduce reliance on fossil fuel imports,” she explained.
Thurbon said that China was using this transition to boost economic security, social security and geostrategic security. She viewed this as a huge security-enhancing opportunity and every country had the ability to use the energy transition as a national security multiplier.
“We are seeing an enormous dynamism across emerging market economies driven by China. This boom loop is being driven by enormous investments in green energy. Two-thirds of global investment flowing into renewable energy is driven largely by China,” she said.
Thurbon said that China was taking an interesting approach to building relationships with countries by putting economic engagement on the forefront of what they had to offer.
“China is doing all it can to ensure economic partnership with emerging economies are productive. It’s important to approach alliances as not just political alliances but investment in economy, future and the flourishment of a state,” she said.
The panel criticized global economic treaties and laws, and expressed the need for immediate reforms in economic governing bodies.
“If you are a developing economy, the rules of the WTO, for example, are not helpful for you to develop. A lot of the rules make it difficult to pursue an economic development agenda. These regulations are not allowing the economies to grow,” Thurbon said.
“Serious reform must be made in international trade agreements, economic bodies and rules and guidelines,” she added.
Prasad echoed this sentiment and said there was a need for national and international reform in global economic institutions.
“These institutions are not working very well so we can reconfigure them or rebuild them from scratch. But unfortunately the task of rebuilding falls into the hands of those who are shredding them,” he said.
WEF attendees were invited to join the Global Collaboration and Growth meeting to be held in Saudi Arabia in April 2026 to continue addressing the complex global challenges and engage in dialogue.
