Political risk is of high importance when measuring risk prior to an investment. The recent laws concerning real estate investments in the gulf country have decreased some land values upto 40%. Economic performance, especially in the real estate sector, is strongly linked to the politics of the country. Plans of transforming the country into a regional financial and commercial center have come and gone, repeatedly.Kuwaitis in general are extremely dependent on the government. The recent debacle of dewaniya demolition, bad debt repayment, salary increase and again, salary increase have shown the direct correlation the citizens place between the parliament and their pockets.
A Kuwaiti citizen is like an employee in a family company on vacation all year round and repeatedly asking for a pay raise. They are guaranteed employment and receive an increase in wages (regardless of contribution).
Kuwait has fallen behind its Gulf neighbors economically, but not politically. If the Gulf state can repair its political situation then it can begin to prepare its economic agenda. The plan for a regional financial hub, commercial center or logistics center for the region will only occur once the political sector is stable, sophisticated and willing to work based on ethics rather than vote count.Also see “Kuwaiti parliament and economy“
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