Yawar Mian talks to Ali Al Nikhailan, Kuwait’s Stockholm based Ambassador to Sweden, Norway, Denmark and Iceland to get an insight into the business relationship between his country and Scandinavia, as well as the opportunities for creating new joint ventures, technology-based partnerships and increasing bilateral trade.
Ambassador Ali Al Nikhailan is an experienced diplomat with a deep understanding of Kuwait’s diverse development needs that could be met through building partnerships and long-term commercial relationships with public and private sector businesses and organisations in Scandinavia.
The ambassador says that the economic and social development agenda in today’s Kuwait is being driven by the realisation to bring about a positive change that focuses on the introduction of business-friendly laws and regulations, and the acquisition of knowledge and quality education for the country’s young population.
“We used to be a very closed country. Now we are entering a new era of development, focusing on expanding the economy with a new strategy for Kuwait’s future growth. Since 2003, the whole economic structure is being reformed to turn Kuwait into a regional financial centre in the Middle East. New laws and regulations have been issued by the parliament to attract foreign investments and Kuwait is now an open country with an open skies policy,” says Al Nikhailan.
There is much evidence that the development of modern infrastructure and facilities, that could ensure sustainable development, is being pursued with a new vigour and intensity. In April 2010, the Kuwaiti parliament approved an ambitious development plan to invest $130 billion over the next five years on infrastructure, new cities and ports, transportation systems, new communities and hospitals, as well as the oil sector.
“Kuwait has been dependent on oil as its main source of income, we are now seriously diversifying the economy and the private sector has the freedom to invest and develop the economy. We already have several foreign banks and financial institutions working in Kuwait and the doors are open for anyone with a long-term and sustainable investment strategy to add value and make use of the opportunities,” Al Nikhailan says.
Kuwait signed a five-year cooperation agreement in 2009 with Nasdaq OMX Exchange in Stockholm and has acquired a modern share trading system for the Kuwait Stock Exchange that will be in place by the end of August 2011. The agreement focuses on upgrading technology, training and carrying out joint studies over the next five years and could be extended for another five years.
Investment in Sweden
Total Kuwaiti investments in Sweden now stand at more than $1 billion. They include ownership and stakes in the oil sector including the OKQ8 retail brand and the real estate sector. This low level of investment, says the ambassador, is due to the expensive projects in Sweden compared with the rest of Europe.
Nevertheless, the level of Kuwaiti investments in Sweden could increase with the signing of new bilateral agreements between the two countries. From 20-21 October in 2010, a group of Swedish oil and energy companies visited Kuwait to meet the Kuwaiti oil minister and in early October Kuwait’s commerce minister was in Sweden to meet the Swedish trade minister Eva Björling.
“Sweden contends that due to the sustainable nature of the projects they are in fact cheaper in the long-term and we believe the double taxation agreement will help increase Kuwaiti investments in Sweden. There is also a need for making the Kuwaiti investors understand the long-term economic and operational benefits of sustainable projects,” Al Nikhailan says.
In April 2011, the Kuwaiti commerce minister is scheduled to visit Stockholm with a big delegation. The visit could see the finalisation of two new agreements – one focusing on trade cooperation and annual meetings headed by trade ministers of the two countries, and the other on avoiding double taxation.
“We hope to sign both agreements by mid-2011. We already have an investment protection agreement with Sweden. The objective is to build a strong base for long-term and sustainable economic relationship. The real potential for trade and economic partnerships has not been realised. We are not satisfied and want to increase the level of cooperation,” says Al Nikhailan.
Fresh Water from Iceland
Kuwait has an ambitious plan for a long-term economic relationship with Iceland. Al Nikhailan met the president of Iceland in 2010 to explore opportunities and to overcome the shortage of clean water in Kuwait. Discussions are currently ongoing for acquiring a glacier in Iceland under a 25-30 year agreement to source fresh water that could be transported in large tankers by sea to Kuwait.
Pollution is a major challenge in Kuwait, a major producer of crude oil and an important member of the Organisation of Petroleum Exporting Countries (OPEC). The ambassador says Kuwait is keen to acquire Scandinavian clean technology for carbon capture and is currently in discussions with Norway’s Statoil. Similar projects could also see the involvement of clean technology providers from Sweden and Denmark.
“We realise the need to modernise the education system and training for clean technologies and sustainable development in Kuwait. There are various international universities operating in Kuwait now and we would like to see a Scandinavian university operating in Kuwait or have a partnership with a Kuwaiti university in the coming months and years,” says Al Nikhailan.
Promoting Kuwaiti Culture
Promoting Kuwait’s culture in Scandinavia is also high on the ambassador’s diplomatic agenda. In November 2010, a Kuwait Cultural week was held in Sweden. It featured leading singers from Kuwait who performed for two nights in Stockholm and one night in Goteborg. Lecturers and academics from Kuwaiti universities highlighted Kuwait’s history.
“We feel that we need to present the Kuwaiti culture and civilisation to the people of Scandinavia and have planned several cultural activities in Sweden. We are organising a cross-cultural dialogue on various subjects including the rights of women. Our relationship with Scandinavia dates back to the 18th century and we are committed to strengthening it further,” Al Nikhailan says (ScandinaviaMideast.com).