THE NATIONAL VISION OF KUWAIT NEW KUWAIT 2035

THE NATIONAL VISION OF KUWAIT NEW KUWAIT 2035 NOVEMBER 2020

New Kuwait 2035 Kuwait National Development plan Faris Al Obaid Advisor to His Excellency, The Secretary-General of the Supreme Council for Planning and Development State of Kuwait

Background The country and the evolution

Resource rich nation at the junction of Middle East, Africa, Eastern Europe, Central Asia and the Far East © NEWKUWAIT 4

Kuwait is building the future with four distinct types of capital SOCIAL CAPITAL • Population of 4. 5 million, • Constitutional monarchy • Median age of 34 years • Democracy • Kuwaiti nationals 30% of the total population • Civil law system • Population growth of 3% NATURAL CAPITAL • Crude oil representing almost 10% of global reserves • Sunshine all-year round © NEWKUWAIT INSTITUTIONAL CAPITAL • Extensive coastline of 500 kilometers • Separation of power between legislature, executive and judiciary GEOGRAPHICAL CAPITAL • Strategic location at the tip of the Arabian Gulf • Land borders with Saudi Arabia and Iraq • Close proximity to other major regional markets 5 5

The old Kuwait was a trading port dominated by the private sector 6500 BC - 1450 1600 -1930 s 1938 Trading hub Trading Port Discovery of oil • Trading hub through several civilizations • Trading port between India and • Oil discovered in the Middle East Burgan field • Part of the Silk and Spice route • Economy centred around pearl fishing, trading and small and medium businesses Low government intervention and high private sector involvement Productive labour market © NEWKUWAIT Low GDP per pax Taxation system 6

The current Kuwait is dependent on oil exports and on the public sector 1952 -1953 1961 -1963 1982 -1991 -Present Oil exports Independence Crisis Reconstruction • Oil export starts • End of British Protectorate • Stock market crash • Reconstruction • Oil price slump • Economy centred around petroleum industries and investments • Kuwait Investment Board established • Constitution drafted • First parliamentary elections held • Regional wars and invasion High government intervention and low private sector involvement Unproductive labour market © NEWKUWAIT High public employment High GDP per pax Welfare system 7

Kuwait experiences several important challenges… Kuwaiti nationals in the labor force will grow by 40% by 20351 Kuwaitis live eight years shorter than in people in the top longevity countries 2 High perception of corruption, reflected in 78 th rank in the Corruption Perception index 3 230, 000 180 Nationals need to work in the private sector by 2035 countries 72% 74, 000 78 th of deaths caused by NCDs Kuwaitis work in the private sector today Kuwait ranks 111 th out of 157 countries for harmonized test scores in the Human Capital Index 4 rank Women only occupy 13% of leadership positions in the public sector 5 157 countries 111 th rank 13% Of leadership positions held by women Source: 1. Oxford Economics 2018, 2. WHO 2016, 3. Transparency International 2018, 4. World Bank 2018, 5. Central Statitics Bureau 2018 © NEWKUWAIT 8

… that need to be addressed in the coming years Kuwaiti youth unemployment rate is more than 4 x the overall rate among nationals 1 Kuwait ranks 81 st of 139 countries in Government ICT usage in the Networked Readiness Index 2 There are many more people seeking housing than there available units 3 139 27% countries 94, 000 81 st housing units demand unmet rank youth unemployment With the current fiscal spending trend and oil price, the national net reserves could erode significantly by 20354 Kuwait ranks 54 th out of 140 countries in the Global Competitiveness Index while Gulf peers ranked on average 39 th 5 140 Net reserves countries erosion 54 th rank Source: 1. Central Statistics Bureau 2018, 2. World Economic Forum 2018, 3. Public Authority for Housing 2018, 4. Oxford Economics 2019, 5. World Economic Forum 2018 © NEWKUWAIT 9

The future sustainability formula Sustainability practices of the Past © NEWKUWAIT Prosperity Sources of the Present Sustainable Prosperous Future 10

Back to basics The future

” KUWAIT VISION 2035 "NEW KUWAIT" “Transforming Kuwait into a financial and trade centre, attractive to investors, where the private sector leads the economy, creating competition and promoting production efficiency, under the umbrella of enabling government institutions, which accentuates values, safeguards social identity, and achieves human resource development as well as balanced development, providing adequate infrastructure, advanced legislation and inspiring business environment. ” “ H. H. Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah © NEWKUWAIT 12

The Vision 2035 spans over seven pillars and Kuwait aims to reach the top 35% position on KPIs across all of them Kuwait’s performance on KPIs on global indexes (Percentage rank from top, where 1 is best and 100 is worst) PUBLIC ADMINISTRATION Financial and trading hub ECONOMY HUMAN CAPITAL LIVING ENVIRONMENT HEALTHCARE INFRASTRUCTURE GLOBAL POSITIONING 100 Macroeconomic stability Mobile-broadband subscriptions No poverty Humanitarian contributions Peace, justice and strong institutions Healthcare access and quality Passport index Domestic credit to private sector Internet users Security Financial system Utility infrastructure E-Participation Non-communicable diseases mortality Corruption perception Life expectancy at birth Nation brand Human Capital Index Product market Transport infrastructure Ease of doing business Government effectiveness Skills Government (ICT) usage Energy efficiency Fixed broadband Travel & tourism competitiveness Innovation capability Global gender gap Labour market Climate and Energy Renewable energy 80 60 40 20 1 Kuwait targets to be among the top 35% of countries Sources: World Economic Forum, Bertelsmann-Stiftung, United Nations, World Bank, World Health Organization, Transparency International, Brand Finance © NEWKUWAIT 13

The Vision includes five overarching national policies Enabled by SME, FDI, PPPP, Privatization and Knowledge Economy Ensures quality standard of living ECONOMY GOVERNMENT EDUCATION SOCIAL SAFETY NET LABOR MARKET © NEWKUWAIT Regulator, not operator Aligned with the labor market New jobs strategy 14

Government entities are enablers for Kuwait’s economy Enabled by SME, FDI, PPPP, Privatization and Knowledge Economy SMEs • The National Fund for Small and Medium Enterprises ( National Fund) • SME Fund will finance up to 80% of capital • USD 7 billion fund • 3 years – Commercial Sabbatical • Incubators-driven FDI PPP Privatization • Kuwait Authority for Direct Investment Promotion Authority • Kuwait Authority for Public Private Partnerships (KAPP) • Supreme Council for Privatization – Execution office • Attract Foreign Investors to the country • Public and private ventures • 20 -year plan for privatization • So far USD 2 billion • Current pipelines of 12 projects • 38 government entities • 100% Foreign ownership • Many other benefits • Responsible for improving Kuwait competitiveness • One successful implementation: North Al Zoor IPO • Two-step approach: corporatization then privatization (PPP) • North Shuaiba power station • Success story: Boursa Kuwait © NEWKUWAIT 15

The Northern Economic Zone (NEZ) supports unlocking the potential of Kuwait as a regional hub • At the junction of the Middle East, Africa, Eastern Europe, Central Asia and the Far East • Collective population within 1. 5 hours of flight equivalent to ~150 million • Historical and cultural ties with Iraq, Iran and Saudi Arabia 1. 5 hours • Constraints on neighbours opens opportunity for Kuwait - best positioned to maneuverer • Connecting the Arabian Gulf with the Belt and Road Initiative (BRI) © NEWKUWAIT 16

NEZ is expected to significantly upscale Kuwait’s economy NEZ GDP Attracted FDI Projected trade volume Approx. $ 35 B p. a. Approx. $ 1. 5 -2 B p. a. Approximately 4 -5 M TEU & 8 -9 M tons of cargo Population, growth & employment Tourism Demography Resource utilization 400, 000 inhabitants growing at 3 -4% annually with 90% employed in the private sector 3 -5 M tourists annually constituting 20% of the overall economy 80% expats and 20% Kuwaiti nationals 90 mcm of desalinated water annually and 4 -5 M Kw. H of energy from solar sources © NEWKUWAIT Projected air traffic 15 -20 M passengers p. a. 17

KNDP 2020 -2025 The next five years

Vision 2035 is realized through five 5 -year national plans 3 1 2010 -2015 LEGISLATURE ACTIVITIES 2020 -2025 PRIVATE SECTOR ENGAGEMENT 2 12 2015 -2020 INFRASTRUCTURE BUILDING © NEWKUWAIT 5 2030 -2035 TOWARDS SMART KUWAIT 4 2025 -2030 KNOWLEDGE BASED ECONOMY 19

KNDP 2020 -2025 formulation framework Vision 2035 Statement VISION Knowledge Economy THEMES Enabling Government Sustainable Prosperity Civic Centric Northern Economic Zone PILLARS PUBLIC ADMINISTRATION © NEWKUWAIT ECONOMY HUMAN CAPITAL LIVING ENVIRONMENT HEALTHCARE INFRASTRUCTURE GLOBAL POSITIONING 20

The framework aligns national priorities across five themes Northern Economic Zone Creating an investment-friendly environment and worldclass infrastructure to attract international investments, and significantly grow Kuwait’s economy beyond oil Knowledge Economy Building the foundations for Kuwait to carve out a role in the global knowledge-based economy, driven by specialized jobs created by the private sector Enabling Government Reshaping the government’s role from operator to policymaker and regulator, creating an inspiring and fair environment for people and businesses Sustainable Prosperity Developing the path for long-term prosperity through a balanced and private sector driven economy Civic Centric Equipping and empowering citizens and residents with skills and incentives to participate and thrive in the private sector © NEWKUWAIT 21

Key programs of Kuwait 2020 -2025 Theme Program Northern Economic Zone 1 Unlock the northern hub potential 2 Foster a dynamic private sector 3 Equip the people with the skills and incentives for future growth 4 Develop a transparent and synergistic government 5 Build a connected and integrated infrastructure 6 Build a livable and harmonious environment 7 Improve our health and wellbeing 8 Contribute to the global community Knowledge Economy Enabling Government Sustainable Prosperity Civic Centric © NEWKUWAIT Pillar 22

Kuwait aims to achieve twenty-eight outcomes 1 Unlock the northern hub potential 2 LEGAL FRAMEWORK TO FACILITATE INVESTMENT UPGRADED LAND, AIR, AND SEA CONNECTIONS COMPETITIVE ICT SECTOR FOR THE KNOWLEDGE ECONOMY WORLD-CLASS SPECIALIZED KNOWLEDGE CLUSTERS 7 Improve our health and wellbeing 8 Contribute to the global community BETTER LIVABLE ENVIRONMENT CULTIVATED WELLNESS AND ACTIVE LIFESTYLES SKILLED AND EFFICIENT LABOR FORCE RECOGNIZED LEADER IN INTERNATIONAL DEVELOPMENT CLEAN OUTDOOR AIR QUALITY OPTIMIZED HEALTHCARE QUALITY WORLD-CLASS EDUCATION SYSTEM MEETING POINT OF IDEAS, CULTURE, AND HISTORY SUSTAINABLE WASTE & WATER UTILITIES © NEWKUWAIT Build a livable and harmonious environment INTEGRATED FACILITIES AND LAND MANAGEMENT CONDUCIVE AND FAIR BUSINESS ENVIRONMENT TRANSPARENT FINANCIAL RESOURCE MANAGEMENT 6 Equip the people with the 4 Develop a transparent and skills and incentives for synergistic government future growth HIGH PRIVATE SECTOR GDP CONTRIBUTION CUSTOMER FOCUSED SERVICE DELIVERY ANCHOR ASSETS IN PLACE Build a connected and integrated infrastructure 3 EFFECTIVE AND LEAN GOVERNMENT INDEPENDENT INSTITUTIONAL SET-UP 5 Foster a dynamic private sector ENHANCED HEALTH LITERACY CENTER OF CONFLICT RESOLUTION AND PEACE PROMOTION INCLUSIVE SOCIAL PROTECTION SYSTEM 23

To implement, Kuwait applies 7 types of mechanisms Regulation and standards Regulatory frameworks or standard levels Institutions New, separated, or merged institutions required Capabilities New internal capabilities required Digitization Use of digital tech to transform operating model Laws & acts Legislative frameworks needed to enable change Private sector involvement Mechanisms to involve private sector, such as SMEs and PPP Public sector investment © NEWKUWAIT KD Capital expenditure to build or develop physical assets 24

The KNDP 2020 -2025 is informed by the Sustainable Development Goals © NEWKUWAIT 25

Reasons for success

The Kuwaiti SPECIAL ingredients Institutions functioning within a constitution Existing infrastructure upgraded to a world class Visionary Leadership with no limit The commitment

THE COMMITMENT © NEWKUWAIT 2017 28

THE COMMITMENT © NEWKUWAIT 2018 29