Kuwait
This publication contains the 2022 Second Round Peer Review on the Exchange of Information on Request for Kuwait. It refers to Phase 1 only (Legal and Regulatory Framework).
The slowdown in market demand for oil is putting increasing pressure on Kuwait's current economic and social model. This model is based on the distribution of petroleum export proceeds to Kuwaiti citizens, with relatively limited long-term investment in knowledge production and the upgrading of the national innovation capacity.
The transition towards a knowledge-based society – where value creation, the resolution of societal challenges and the well-being of society at large will be based on the production, diffusion and implementation of knowledge – is becoming an imperative. This is recognised within the national development strategy which formulates the objective of attaining 'Smart Kuwait' by 2035.
Such a transition is challenging and can only be achieved through the build-up of appropriate governance of the STI system with adequate institutions such as a Ministry and a professional agency with a mandate for research and innovation. This set-up should help raise awareness and reduce barriers to innovation, reinforce the scientific research base, develop the support for business innovation, foster knowledge diffusion and co‑creation between science and industry, build up the human capital needed, and establish the role of science, technology and innovation in tackling Kuwait's societal challenges.
The world is increasingly facing a technologically changing employment landscape and such changes are directly affecting the future demand for skills. For regional economies built on labour migration, the impending changes will affect migrants and their families, their countries of origin and the recruitment systems they are attached to – and ultimately disrupt the development benefits of migration. This paper investigates how the future of the employment landscape will affect migration within the Abu Dhabi Dialogue, a regional consultative process for migration in Asia. It investigates the impending changes in the demand for skills in countries of destination, how such changes will affect migration processes and whether countries of origin are ready for the changes. It provides recommendations on how regional consultative processes can foster dialogue between key actors from both countries of origin and destination to better navigate future changes and ensure a smooth transition.
This report identifies the opportunities that Islamic finance presents for donors. To achieve these, Arab and OECD Development Assistance Committee donors need to mobilise innovative forms of financing and deliver the call to deepen the transformation of development finance systems. DAC members could do so by broadening and deepening exposure to alternative forms of financing, such as Islamic finance. Islamic finance represents USD 2.5 trillion – a share of which could be mobilised for development – and its tenets resonate across the member countries of the Organisation for Islamic Cooperation and beyond. Arab donors could harness Islamic finance, as a means to strengthen partnerships with DAC members, whilst increasing the effectiveness of existing aid flows in countries and contexts where they have considerable access. Doing so could create a more equitable and stable development finance order capable of delivering the SDGs and achieve greater impact in partner countries. Both communities would then be able to chart a path for all development actors, notably the private sector, development finance institutions and other bilateral donors. This report provides a set of action points for Arab and DAC donors, highlighting the benefits of engaging in and co-operating through Islamic finance.
This report analyses the implementation of the AEOI Standard in Kuwait with respect to the requirements of the AEOI Terms of Reference. It assesses both the legal frameworks put in place to implement the AEOI Standard and the effectiveness of the implementation of the AEOI Standard in practice.
Kuwait provides development co-operation under the broad framework of its commitment to the 2030 Agenda for Sustainable Development.The Kuwait Fund for Arab Economic Development (KFAED) – the first fund to be established in the Arab world – primarily provides concessional loans for development projects that are a high priority to recipient countries, following a demand-driven approach. Kuwait’s total official development assistance (ODA) (USD 256.3 million, preliminary data) decreased in 2022, representing 0.15% of gross national income (GNI). This was mainly due to a decrease in its bilateral grants and loans.
This report analyses the implementation of the AEOI Standard in Kuwait with respect to the requirements of the AEOI Terms of Reference. It assesses the legal frameworks put in place to implement the AEOI Standard.
This chapter presents an overall assessment of Kuwait’s innovation system and policy, reflecting analytical findings of the review. It identifies the strengths and weaknesses of the national innovation system, and develops specific policy recommendations designed to facilitate Kuwait’s transition towards “Smart Kuwait”, a knowledge-driven society, which is the stated goal of the national development plan. Specific recommendations address the issues of governance of the overall innovation system, framework conditions for innovation, strengthening human resources, fostering critical mass and excellence in public research, intensifying diversification, fostering business innovation, and increasing and diversifying the sources of knowledge for enterprises.
This chapter presents the Higher education and research activity in Kuwait. It starts with a brief overview of the general principles that govern effective higher education and research based on international experience. It then successively reviews the main public and private higher education institutions, and the research institutes, KISR in the first place. A final section discusses KFAS supports to research activities.
This chapter presents the business innovation activity in Kuwait. It starts with some background concerning the diversification issue and the imperative for Kuwait to develop into a knowledge-based economy and society. It then gives a brief overview of the characteristics of an efficient business innovation system, based on international experience, discussing the role of research and development in enterprises, innovative entrepreneurship, knowledge diffusion, and business-academia linkages. The chapter then analyses the structure of the Kuwaiti business sector, which is dominated by state-owned enterprises in oil and other strategic sectors, with a relatively underdeveloped small and medium-sized enterprise sector. The chapter moves on to discuss the innovation and R&D performance in enterprises, followed by an analysis of business-academia co‑operation and linkages. The final section discusses Kuwaiti policies in favour of innovation and R&D in the business sector, which has many opportunities for improvement.
The OECD Review of Kuwait’s Innovation Policy is part of a series of OECD country reviews of innovation policy (www.oecd.org/sti/innovation/reviews). It was requested, and entirely funded, by the authorities of Kuwait, represented by the Kuwait Foundation for the Advancement of Science (KFAS) and the General Secretariat of the Supreme Council for Planning and Development (SCPD), and was carried out by the OECD Directorate for Science, Technology and Innovation.
Oil has provided Kuwait with wealth and well-being for the past 80 years. Slowing demand for oil is threatening the sustainability of the current economic and social model, emphasising the need to transition towards a knowledge-based society – where value creation, the resolution of societal challenges and the well-being of society at large will be based on the production, diffusion and implementation of knowledge.
This chapter first discusses Kuwait’s macroeconomic performance, and in particular, the benefits and long-term risks caused by Kuwait’s exceptional resource endowment, the diversification challenge, and its labour market and social contract. The second section discusses Kuwait’s framework conditions, especially those related to the business environment and entrepreneurship. The last section reviews Kuwait’s aggregate innovation performance. It starts by examining input indicators: R&D expenditure across sectors, education input and outcomes, and the availability of human resources for innovation. It then reviews indicators of innovation output to highlight qualitative and quantitative characteristics of Kuwait’s innovation system, in particular the quantity and quality of research outcomes, the number of patents, and the share of high R&D-intensive activities in its total exports.
This chapter presents the structure and mechanisms of governance of the STI system in Kuwait. Following a short summary of some general principles regarding effective STI governance structures, this Chapter presents a general overview of the Kuwaiti political and policy systems and discusses successively the three main levels of an STI governance structure: STI strategy and coordination; STI policy formulation and funding; and STI policy implementation.
Kuwait’s legal framework implementing the AEOI Standard is not in place in accordance with the requirements of the AEOI Terms of Reference. While Kuwait’s international legal framework to exchange the information with all of Kuwait’s Interested Appropriate Partners (CR2) is consistent with the requirements, the domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) has significant deficiencies in areas that are fundamental to the proper functioning of the AEOI Standard. More specifically, deficiencies have been identified in Kuwait’s enforcement framework.
This chapter draws lessons from the Korean experience and identifies what can be learned from the catching up strategy and the progressive integration of regional concerns into the country’s growth strategy: from the evolution of regional development policy, and the recent paradigm shift towards regional competitiveness, to the current challenges that Korea is facing to advance further in regional development. The chapter concludes by underlining that beyond sharing knowledge on general lessons, there is no single response to development challenges. Each country needs to identify its current opportunities and challenges, establish its own priorities and develop its own strategy, mixing continuity in effort with experimentation of new policies to address new challenges, as Korea has been doing.