Kuwait election gives hope to businesses
13 June 2023
Kuwait’s recent snap election has offered a glimmer of hope to businesses with its promise to form a government freshly mandated to make key policy decisions to help revitalise the country’s economy.
The vote took place on 6 June after Kuwait’s constitutional court in March annulled the results of last year’s election and reinstated the previous parliament elected in 2020.
Opposition lawmakers won 29 of the legislature’s 50 seats, according to results published by the official Kuwait News Agency.
While the make-up of the new parliament is similar to the one elected last year and later annulled, with all but 12 of its 50 members retaining their seats, business leaders say there is potential for ending the country’s political deadlock.
“It’s still a difficult situation,” said one source. “After a couple of days have passed, we will have a much clearer picture of the situation and whether or not a government is going to be formed.”
Picking a prime minister
A key indicator as to whether the country will break the political deadlock will be whether a prime minister is named over the coming days and who that prime minister is.
One source said: “It is possible that, if the right person is named as prime minister, the political deadlock will be broken, a government will be formed, and the key strategic economic decisions that need to be made will be pushed through.”
Turnout reached 50 per cent one hour before polls closed, according to the Kuwait Transparency Society, a non-governmental organisation. Last year’s election saw a turnout of 63 per cent.
While lawmakers are elected, Kuwait’s cabinet ministers are installed by the ruling Al-Sabah family, which maintains a tight hold over political life.
Continual standoffs between the branches of government have prevented lawmakers from passing economic reforms, while repeated budget deficits and low foreign investment have added to an air of gloom.
Speaking after the new parliament was elected, Janan Bushehri, the new parliament’s only female member, said she expected it “to seek stability and move ahead on outstanding issues, whether political or economic”.
Far-reaching ramifications
The country has seen a dramatic contraction in the value of its oil and gas projects market over recent years as the political deadlock has blocked approvals for major infrastructure projects in the sector.
Between the start of 2020 and the start of May this year, the total value of all active oil, gas and chemical projects in Kuwait declined by 65 per cent from $67.1bn to just $23.5bn.
Many industry stakeholders believe that breaking the political deadlock is essential for reversing the contraction seen in the country’s oil and gas sector.
The interim government has only approved essential projects such as maintenance. It has avoided making decisions on major strategic projects, such as the planned $10bn Al-Zour petrochemicals complex being developed by state-owned Kuwait Integrated Petroleum Industries Company (Kipic).
Kuwait is also struggling with an increasingly unsustainable public sector wage bill that has stifled productivity in both its private and public sectors.
This is unlikely to be resolved without strong leadership and an end to the political impasse.
Reform requirements
In the absence of strong leadership, the country will likely struggle to catch up with other nations in the region that have enacted economic reforms, particularly taxation.
In 2017, Kuwait agreed, along with its co-members of the Gulf Co-operation Council, to introduce value-added tax, but has yet to implement it or announce a set date for doing so.
The IMF has also encouraged Kuwait to introduce taxation such as excise duties, expand corporate tax to domestic firms and implement property tax.
On 5 June, the IMF issued a statement saying: “The dominance of oil in the economy, coupled with global decarbonisation trends, necessitates fiscal reforms to reinforce sustainability, and structural reforms to boost non-oil private sector-led growth.
It noted that Kuwait has benefitted economically from higher oil prices over recent years – helping its economy recover from the pandemic – with fiscal and external balances strengthening and financial stability being maintained.
However, it added: “Political gridlock between the government and parliament has hindered reform progress, which could be made now from a position of strength.”
The IMF highlighted the failure to enact reforms as a key risk for the country’s economy.
It said: “Delays in needed fiscal and structural reforms could give rise to pro-cyclical fiscal policy and undermine investor confidence while hindering progress towards diversifying the economy and enhancing its competitiveness.”
Though the chance of a new strong political leadership emerging from the latest election remains slim, if it does occur, it could be transformational for the country by accelerating needed fiscal and structural reforms, boosting investor confidence and stimulating private investment.
Register for MEED's guest program now to access this article.
Exclusive from Meed
-
-
-
-
-
Read the May 2026 MEED Business Review30 April 2026
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Qiddiya receives high-speed rail PPP prequalifications
1 May 2026
Register for MEED’s 14-day trial access
Saudi Arabia’s Royal Commission for Riyadh City, in collaboration with Qiddiya Investment Company (QIC) and the National Centre for Privatisation & PPP, received prequalification statements from firms on 30 April for the public-private partnership (PPP) package of the Qiddiya high-speed rail project in Riyadh.
This follows the submission of prequalification statements for the engineering, procurement, construction and financing (EPCF) package on 16 April, as reported by MEED.
The prequalification notice was issued on 19 January, and a project briefing session was held on 23 February at Qiddiya Entertainment City.
The Qiddiya high-speed rail project, also known as Q-Express, will connect King Salman International airport and the King Abdullah Financial District (KAFD) with Qiddiya City. The line will operate at speeds of up to 250 kilometres an hour, reaching Qiddiya in 30 minutes.
The line is expected to be developed in two phases. The first phase will connect Qiddiya with KAFD and King Khalid International airport.
The second phase will start from a development known as the North Pole and travel to the New Murabba development, King Salman Park, central Riyadh and Industrial City in the south of the city.
In November last year, MEED reported that more than 145 local and international companies had expressed interest in developing the project, including 68 contracting companies, 23 design and project management consultants, 16 investment firms, 12 rail operators, 10 rolling stock providers and 16 other services firms.
In November 2023, MEED reported that French consultant Egis had been appointed as the technical adviser for the project. UK-based consultancy Ernst & Young is acting as the transaction adviser, and Ashurst is the legal adviser.
Qiddiya is one of Saudi Arabia’s five official gigaprojects and covers a total area of 376 square kilometres (sq km), with 223 sq km of developed land.
https://image.digitalinsightresearch.in/uploads/NewsArticle/16641057/main.gif -
Saudi Arabia launches $2bn Jawharat Al-Arous project
1 May 2026
Saudi Arabia has launched Jawharat Al-Arous, an SR8bn ($2bn) private-sector-led residential development in north Jeddah.
The scheme covers 107 million square metres and comprises 18 residential neighbourhoods planned to accommodate more than 700,000 residents. It will provide more than 80,000 residential and commercial plots.
The masterplan also includes 41 government-backed infrastructure and service zones to support large-scale urban expansion.
The project was unveiled by Mecca Region Governor Khalid Al-Faisal and will be overseen by Saud Bin Mishaal Bin Abdulaziz.
According to a recent report by real estate firm Cavendish Maxwell, Jeddah’s residential stock stood at about 1.09 million units at the end of 2025, following the completion of around 4,000 units that year.
An expanding pipeline of about 18,000 units in 2026 and 22,000 units in 2027 is expected to bring total stock to around 1.14 million units by 2027, gradually adding supply without destabilising market equilibrium.
GlobalData expects the Saudi construction industry to grow by 3.6% in real terms in 2026, supported by increased foreign direct investment (FDI) and investment in the housing and manufacturing sectors.
The residential construction sector is forecast to grow by 3.8% in real terms in 2026 and to record an average annual growth rate of 4.7% between 2027 and 2030, supported by Saudi Vision 2030’s goal of increasing homeownership from 65.4% in 2024 to 70% by 2030, including through the delivery of 600,000 homes by 2030.
MEED’s April 2026 report on Saudi Arabia includes:
> COMMENT: Risk accelerates Saudi spending shift
> GVT &: ECONOMY: Riyadh navigates a changed landscape
> BANKING: Testing times for Saudi banks
> UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
> DOWNSTREAM: Saudi downstream projects market enters lean period
> POWER: Wind power gathers pace in Saudi Arabia
> WATER: Sharakat plan signals next phase of Saudi water expansion
> CONSTRUCTION: Saudi construction enters a period of strategic readjustment
> TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure pushTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16640863/main.png -
Damage to US bases in region expected to cost more than $15bn
1 May 2026
The $25bn estimate a Pentagon official gave US lawmakers on 29 April did not include the cost of repairing damage to US bases in the Middle East, and the real cost of the war is likely to be between $40bn and $50bn, according to CNN.
That would put the cost of repairing bases and replacing destroyed assets at between $15bn and $25bn.
Jules Hurst III, the Pentagon official serving as the agency’s comptroller, told the House Armed Services Committee that “most” of the $25bn he cited had been spent on munitions. Defence Secretary Pete Hegseth declined to say whether the figure included repairs to damaged US bases.
Iranian strikes across the Gulf in the early days of the war significantly damaged at least nine US military sites in 48 hours, hitting facilities in Bahrain, Kuwait, Iraq, the UAE and Qatar.
Six US servicemembers were killed in an attack on a command post in Kuwait, and 20 more were injured.
Three sources told CNN that the figure provided to the House Armed Services Committee did not include the cost of rebuilding US military installations and replacing destroyed assets.
One source said the true cost would likely be between $40bn and $50bn.
US contractors such as KBR and Fluor, as well as local firms, are likely to be among the leading contenders for contracts to repair and rebuild US bases in the region.
https://image.digitalinsightresearch.in/uploads/NewsArticle/16638663/main.gif -
Morocco seeks financing for $25bn gas pipeline
1 May 2026
Register for MEED’s 14-day trial access
Morocco’s state-owned agency for oil, gas and mineral resources is preparing to launch a fundraising campaign for its planned $25bn gas pipeline to transport West African gas to the Mediterranean coast, according to officials.
This will be the first time the Office National Des Hydrocarbures & Des Mines (Onhym) has sought to raise capital since it was restructured as a joint-stock company in February.
The restructuring was implemented to try to bolster the agency’s “capacity to structure partnerships, mobilise diversified funding and support large-scale projects”, according to a company statement.
Under current plans, the proposed gas pipeline will extend for 6,900 kilometres, including onshore and offshore segments.
The Nigeria-Morocco Gas Pipeline (NMGP) will link gas deposits in Nigeria, Senegal and Mauritania to 10 neighbouring African nations.
According to the plan, the project’s northern terminus will connect to the existing Maghreb-Europe Gas Pipeline, which links Morocco and Spain.
In its statement, Onhym described the planned pipeline as a “major opportunity” to unlock some of the world’s largest untapped gas reserves, saying it would improve “Euro-African energy security”.
Last month, Omco, Morocco’s gas-transport firm, said that a final investment decision (FID) for the first phase is expected to be finalised before the end of this year.
Also last month, Amina Benkhadra, the director-general of Onhym, said that Nigeria and Morocco were planning to sign an intergovernmental agreement to formalise the legal and regulatory framework for the pipeline.
Benkhadra said that the agreement would establish a “high authority” for the pipeline.
This body will be based in Nigeria and include ministerial representatives from each participating country to ensure political coordination.
To navigate global financing challenges and complex cross-border logistics, the project is expected to be developed in stages rather than waiting for a single FID.
Early phases will link Morocco to gas fields in Mauritania and Senegal, while southern segments will connect Ghana to Cote d’Ivoire and eventually to Nigeria.
The pipeline is being designed with an annual capacity of 30 billion cubic metres a year, according to officials
Half of that volume is earmarked for Morocco’s domestic needs and exports to Europe, which has sought to diversify its energy sources following geopolitical disruptions.
To manage construction, a joint-venture project company will be formed between Onhym and the Nigerian National Petroleum Company.
Feasibility studies for the pipeline were completed last year.
Onhym awarded UK-based Penspen the phase 1 front-end engineering and design (feed) contract for the project in 2019.
Then, in 2022, Onhym awarded Australia’s Worley the phase 2 feed contract.
At the time, Worley said that the overall feed services would be managed by Intecsea, its offshore engineering consultancy business headquartered in the Netherlands.
It also said that Advisian, its global consulting business, will provide research connected to the acceleration of electrification and the feasibility of energy self-sufficiency in the region.
Its UK and Madrid offices would analyse the possibility of using renewable energy resources to power the pipeline.
https://image.digitalinsightresearch.in/uploads/NewsArticle/16635907/main.jpg -
Read the May 2026 MEED Business Review
30 April 2026
Download / Subscribe / 14-day trial access The regional war – and resulting disruption to oil and gas shipping – has triggered a major global energy security shock that is likely to recalibrate long-term decisions on how energy is produced and consumed.
The effective closure of the Strait of Hormuz is exposing the vulnerability of Middle East supply chains and pushing import-dependent countries to strengthen energy security by expanding domestic fossil fuels, speeding up nuclear projects, and investing in renewables and storage.At the same time, higher prices are encouraging producers unencumbered by reliance on the Strait to boost output.
Like the oil shocks of the 1970s, the conflict is likely to have lasting effects, reshaping energy policies and partnerships and accelerating diversification away from existing arrangements. Read more here.
The conflict is also undermining the business case for Middle East liquefied natural gas (LNG) projects, as prices rise, demand drops and confidence in the reliability of the region’s suppliers is eroded.
May’s market focus is on the UAE, where disruption from the Iran war has challenged every assumption behind the country’s non-oil model.
This edition also includes our industry report on Gulf capital markets, as well as analysis on the region’s initial public offering market.
In the latest issue, we explore why regional banks are feeling the strain despite strong buffers; consider why force majeure offers no shield against construction breaches; examine the Public Investment Fund’s 2026-30 strategy and talk to Estelle Brachlianoff, CEO of water infrastructure operator Veolia.
We hope our valued subscribers enjoy the May 2026 issue of MEED Business Review.
Must-read sections in the May 2026 issue of MEED Business Review include:
> AGENDA: War in the Middle East recalibrates global energy markets
> REGIONAL LNG: War undermines business case for Middle East LNGINDUSTRY REPORT:
Gulf capital markets
> Damage avoidance frames debt issuance
> Regional IPO market dries up amid war> INTERVIEW: Desalination holds steady amid tensions, says Veolia CEO
> LEGAL: Force majeure will not cure pre-existing construction industry breaches
> BANKS: GCC banks to feel the strain despite strong buffers
> PIF STRATEGY: Public Investment Fund approves 2026-30 strategy
> UAE MARKET FOCUS:
> COMMENT: Conflict tests UAE diversification
> GVT &: ECONOMY: UAE economy absorbs multi-sector shock
> BANKING: UAE banks ready to weather the storm
> ATTACKS: UAE counts energy infrastructure costs
> UPSTREAM: Adnoc builds long-term oil and gas production potential
> DOWNSTREAM: Adnoc Gas to rally UAE downstream project spending
> POWER: Large-scale IPPs drive UAE power market
> WATER: UAE water investment broadens beyond desalination
> CONSTRUCTION: War casts shadow over UAE construction boom
> TRANSPORT: UAE rail momentum grows as trade routes face strain
> DATABANK: UAE GDP projection corrects on conflict> MEED COMMENTS:
> War takes a rising toll on Kuwait’s oil sector
> Libya budget approval could lead to surge in oil and gas projects
> Masdar’s move abroad will not be the last
> Saudi Landbridge finds its moment in Gulf turmoil> GULF PROJECTS INDEX: Gulf index plateaus despite ceasefire
> MARCH 2026 CONTRACTS: Middle East contract awards
> ECONOMIC DATA: Data drives regional projects
> OPINION: The road to hell is paved with gold
> BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts
To see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16623768/main.gif