Given falling oil prices, in your opinion, what needs to be done to boost the Kuwaiti economy?
Oil income comprises about 94 percent of Kuwait’s public revenues. In the face of falling oil prices, Kuwait should achieve a diversified and sustainable economy. Strategically, in coordination with the GCC [Gulf Cooperation Council], Kuwait should invest in oil and gas industries to maximize value by increasing exports and reducing imports. It should also focus on increasing efficiency and sustainability to reduce resource waste, and on human resource development through education and training by establishing effective centers of excellence. If required, Kuwait must resort to introducing corporate taxes for Kuwaiti and foreign companies operating in Kuwait.
How should Kuwait diversify its economy?
Economic diversification is one of the main strategic goals set by the Gulf Cooperation Council. Since the Iraqi invasion in 1990, the contribution of most non-oil economic sectors declined in Kuwait especially after hundreds of companies, foreign institutions, and banking and investment institutions moved elsewhere in the region. Now, like other GCC countries, Kuwait should also achieve significant progress in diversification of sources of income, reducing its reliance on oil. Kuwait should focus on developing tourism, modern industries (non-traditional), consumer products, energy-based industries, and gas-related industries and services. Kuwait has already recognized the problem and begun to remedy it. Kuwait should also continue to support SMEs [small and medium-sized enterprises] to meet local and regional demands. This will increase local employment and development of world-class entrepreneurs.
If we exclude the contribution of the oil sector, what is your perspective on the country’s economic outlook?
Kuwait’s economic outlook is expected to improve in coming financial years, despite a recent slide in oil prices. The IMF [International Monetary Fund] expects non-oil GDP growth rates to reach 4 percent to 5 percent in the medium term, driven by consumption and government-led infrastructure development.
How important is the Kuwaiti private sector to economic growth?
The dominance of the public sector over the private sector creates an imbalanced structure in economic activities and has harmed economic growth. The private sector plays an important role in promoting economic development and growth by directly contributing to the quality and standards of living. Kuwait should liberalize rules and regulations, which would create hurdles and obstacles to the private sector in order not to affect and lower its efficiency and profitability.
How important is foreign investment for Kuwait at this time and what type of investment is the country currently in need of attracting?
Diversifying sources of income and minimizing dependency on oil can be achieved by effective attraction of foreign investment and an increase in investment opportunities. Kuwait needs investment in advanced technology. Kuwait also established the Kuwait Direct Investment Authority, which allows 100 percent foreign ownership of companies.
Which sectors do you believe would benefit the most from foreign partnerships?
Kuwait should promote a number of sectors that can most benefit from foreign investment and expertise, such as infrastructure investments, water, waste-water treatment, power, and communications. Kuwait also should focus on investment in the banking and financial sectors, insurance, IT and software development, and hospitals and pharmaceuticals.
How does this affect the employment situation in Kuwait?
The government is responsible for providing jobs for all Kuwaitis, and each Kuwaiti has the right to work in a suitable job. However, the heavy employment of Kuwaitis exerts pressure on the public budget and employing more Kuwaitis to the public sector will not increase the society’s level of wealth.
What role will future generations play in the development of Kuwait and its business community?
Kuwait has the advantage of a young, educated, and experienced population in the region. Kuwaiti youth should be provided leadership training and development to prepare them for their future role in enriching the Kuwaiti economy.
What is your current strategy regarding the growth and expansion of Kharafi National in the region, or internationally?
Kharafi National’s growth and expansion can be attributed to its successful approach to build-operate-transfer (BOT), build-operate-own (BOO), and public-private partnership (PPP), which has changed it from the traditional contractor’s role to a service provider to a business partner in the operation of an enterprise. Kharafi National foresees a growth in the facility management and facility maintenance business. The company will also always continue to develop its valuable human resources.
What top projects are you currently working on?
The Clean Fuel Project at the KNPC [Kuwait National Petroleum Company] Ahmadi Refinery is the major project Kharafi National is currently working on. Also, work is under way on the Sulaibiya plant expansion and Central Bank of Kuwait in addition to the fast-track nature projects like power plants, Al Shaheed Park, and the Amiri Diwan Administration building.
How has Kharafi National been able to distinguish itself in the Gulf Region?
Our culture of excellence has distinguished Kharafi National as the region’s most successful infrastructure project developer and integrated contractor with an undeniable reputation for quality, safety, and timely delivery.
What is Kharafi National’s toughest challenge to date?
Safety of employees after the Iraqi invasion of Kuwait and the power-project works at Al Shabab and Demietta during the revolution in Egypt were challenges faced by Kharafi National.
The work on power projects at Al Shabab and Demietta in Egypt were in progress when the Egyptian revolution broke out. The safety of all staff was the prime concern. Kharafi National devised and implemented a plan to carry the company through several weeks of unrest and violence on the streets. Managers remained on their sites monitoring the evolving events and assuring the safety of their staff. Communication was vital during the crisis. To maintain communications, Kharafi National’s IT department setup an Internet link via satellite with a UK-based service provider, when the internet and mobile phone services were cut off to prevent protesters from communicating.
What has been your proudest achievement at Kharafi National?
Throughout its forty years, Kharafi National has been proud to be part of the progress in the GCC and ME [Middle East]. Kharafi National achieved successful completion of power stations at Al Shabab, Damietta, and West Damietta in Egypt, GASCO’s Integrated Gas Development Project–Habshan 5 and ISTP1 in the UAE [United Arab Emirates] and Sulaibiya Wastewater Treatment and Reclamation Plant in Kuwait. Kharafi National developed a robust quality management system with thousands of procedures and ERP [enterprise resource planning] systems, which together serve as a stable platform that enables employees to deliver the results expected from them.
Kharafi National will turn forty next year; how would you like to see the business at age fifty, and what do you want it to symbolize internationally?
Kharafi National will be commemorating its fortieth year of operations next year. With a workforce of over 28,900 employees, Kharafi National has become the region’s most successful project developer of infrastructure. Now, Kharafi National has international business operations in Egypt, the UAE, and Lebanon. Kharafi National will be recognized as a respected world-class project developer of infrastructure by its fiftieth anniversary by expanding its operations across various sectors to the MENA [Middle East and North Africa] region.