meed-logo

line1 line2 line3
SIGN IN / REGISTER

Kuwait navigates unchartered political territory

29 August 2024

 

Kuwait’s political situation and its near-term prospects for governance continue to hinge on the dramatic suspension of the nation’s parliament by Emir Sheikh Meshal Al-Ahmad Al-Sabah.

This drastic measure by the country’s leader came in response to a deepening political stagnation in Kuwaiti politics that has seen successive formations of parliament and government deadlocked over the most fundamental of fiscal legislation: approving the budget and raising the debt ceiling.

Underlying these stumbling blocks are allegations of fiscal and budgetary malfeasance levelled by the elected lawmakers in parliament at the ruler-appointed and ruling family-led cabinet.

In recent years, the proceedings in parliament have become increasingly acrimonious, with lawmakers frequently demanding the right to question cabinet members – a demand that has instead often simply resulted in the dissolution of the government.

Kuwait’s political system has often been described as a “democratic experiment”, as it was a first in the GCC to devolve significant legislative authority to a chamber of fairly freely elected representatives.

On 10 May, however, after the fourth election in four years in pursuit of a functioning government resulted in the same rigmarole, the emir triggered the system’s inbuilt circuit breaker for the first time since its establishment and effectively placed the experiment on hold.

Two days later, the emir announced the formation of a new cabinet headed by Sheikh Ahmad Abdullah Al-Sabah as the returning prime minister. The country’s oil, finance and foreign ministers all retained their posts as well, making it a continuity cabinet, but in the absence of parliament.

Officially, the rules allow for the suspension of parliament for up to four years, enabling direct rule by the emir and his cabinet in the interim. Kuwait has thus returned, temporarily, to something of a default setting for the GCC. But it is a dramatic turn of events for Kuwait given the country’s well-worn electoral legacy – even as its other positively regarded attributes, such as a relatively free press, remain intact.

Project revitalisation

The emir’s decision is nevertheless being viewed in many quarters as a potentially positive development, not least in the projects sector. The political deadlock plaguing the country has been a salient problem for contractors in recent years due to the way parliamentary objections have impeded project spending.

Indeed, political disputes over capital expenditure have come close to scuttling Kuwait’s projects sector, which has seen its activity plummet over the past decade, with the country’s $16.5bn in contract awards in 2016 plunging to just $2.6bn in 2019 and averaging less than $4bn in the past five years. Given the parallel $100bn in project completions over the past 10 years, this fall in awards has resulted in a $50bn net decline in the value of projects under execution.

This loss of value from the projects sector has been detrimental to Kuwaiti contractors, who have been looking abroad in increasing numbers for alternative avenues of work. The drop-off in value in the project market has also been even more dramatic in certain industries, including the oil sector, where the total value of active projects fell from $65bn in early 2019 to just over $5bn by early 2023.

The reduction in oil sector projects, where constant work is required to maintain the performance of the infrastructure, is a threat to the main driver of the Kuwaiti economy and government revenues.

Given the country’s limited diversification and the accounting of the oil sector for 60% of Kuwait’s GDP and 90% of government revenue, the potential long-term consequences of the nation’s political dysfunction metastasising into dysfunction in the oil sector are considerable. 

It is not surprising then that one of the first things on the agenda since the suspension of parliament has been the revival of oil sector projects – with the country’s Central Agency for Public Tenders now meeting three days a week since July to advance the tendering of major schemes.

Political correction

Political reform is also on the table. In his televised address to the nation on 10 May, the emir stated: “The recent turmoil in the Kuwaiti political scene has reached a stage where we cannot remain silent, so we must take all necessary measures to achieve the best interest of the country and its people.”

The presentation of the challenges facing the country in existential terms underlined the heightened perception that Kuwait was careening towards disaster amid political paralysis, falling oil infrastructure investment and snowballing expenses.

However, regardless of the “unimaginable, unbearable difficulties and impediments”, facing the country, the retaking of direct control by the emir and cabinet is no assurance that the trouble is over. The country still faces stark policy choices, including how to tackle its burgeoning public wage bill, which currently stands at about 30% of the country’s GDP and is only set to grow with rising pay and pensions.

These are costs that Kuwait cannot bear without robust oil sector development, and even that might not be enough. Economic projections have suggested public salaries could make up as much as 75% of the budget within five years, which could rapidly shrink the fiscal space for any other spending.

This is a burgeoning dilemma for the country that cannot be tackled overnight, but with four years of determined and unencumbered course correction, Kuwait could at least develop some more options.

Constitutional amendments could also be unveiled to prevent a return to political paralysis when a parliament re-forms. The ability of the house to override the emir’s veto with a simple majority, as well as to hold votes of no confidence for ministers, are two areas where changes could be made to smooth the political process – for example by requiring a super majority to overturn the emir’s veto or by making the conditions necessary to challenge the confidence in a minister more stringent.

Regardless, what is abundantly clear is that the existing system was not functioning as required – at the most fundamental level – in making basic legislative progress. Everything could now get back on track, but there are ample more “difficulties and impediments” to address, and Kuwait needs fresh solutions.

This month's special report on Kuwait includes: 

> GOVERNMENT: Kuwait navigates unchartered political territory
> ECONOMY: Fiscal deficit pushes Kuwait towards reforms
> BANKING: Kuwaiti banks hunt for growth 
> OIL & GAS: Kuwait oil project activity doubles
> POWER & WATER: Kuwait utilities battle uncertainty
> CONSTRUCTION: Kuwait construction sector turns corner

https://image.digitalinsightresearch.in/uploads/NewsArticle/12426397/main.gif
John Bambridge

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Public Investment Fund backs Neom

    16 April 2026

    Commentary
    Colin Foreman
    Editor

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Public Investment Fund (PIF) has backed Neom by including it as one of six strategic ecosystems in its newly approved 2026-30 strategy.

    The future of the $500bn gigaproject had been thrown into doubt following the postponement of the 2029 Asian Winter Games at the Trojena mountain resort, the cancellation of construction contracts – such as the $5bn deal with Italian contractor Webuild for dam works at Trojena – and the slowdown of development at The Line, where tunnelling contracts were cancelled and staff left the project.

    The backing comes as Neom’s operational focus appears to be evolving in response to shifting regional dynamics and global economic conditions. For example, on 15 April Neom posted on its official X account about a new Europe-Egypt-Neom-GCC corridor, describing it as a faster route for time-sensitive goods. It said the corridor combines trucking and ferry services to move goods quickly into the Gulf, adding that importers from several European markets are already using it to reach the UAE, Kuwait, Iraq, Oman and beyond.

    Powered by Pan Marine, DFDS and regional RoPax services, the initiative is positioned as a way to add flexibility and resilience to regional supply chains. This emphasis on logistics and immediate trade utility suggests a shift away from the more speculative architectural announcements that characterised Neom’s early years, towards activity more directly tied to current market realities.

    PIF’s broader 2026-30 strategy places heavy emphasis on “delivering competitive domestic ecosystems to connect sectors, unlock the full potential of strategic assets, maximise long-term returns and continue to drive the economic transformation of Saudi Arabia”.

    The inclusion of Neom as a standalone ecosystem within the Vision Portfolio suggests that while the project remains part of the kingdom’s Vision 2030 goals, it will be subject to the fund's focus on working with the private sector.

    That means the long-term success of Neom will increasingly depend on its ability to attract external investment and function as a viable economic hub rather than just a state-funded construction site.

    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 push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16417262/main.jpeg
    Colin Foreman
  • Kuwait gas project worth $3.3bn put on hold

    16 April 2026

     

    State-owned Kuwait Gulf Oil Company’s (KGOC’s) planned tender for the development of an onshore gas plant next to the Al-Zour refinery has been put on hold due to uncertainty created by the US and Israel’s war with Iran, according to industry sources.

    The project budget is estimated to be $3.3bn, and the last meeting with contractors to discuss the project took place in Kuwait on 10 February.

    Previously, it was expected to be tendered in late March, but the tendering process was delayed due to the regional conflict and disruption to shipping through the Strait of Hormuz.

    One source said: “This tender is now effectively on hold while KGOC waits for increased stability in the region before it invites companies to bid for the contract.”

    Under current plans, the plant will have the capacity to process up to 632 million cubic feet a day of gas and 88.9 million barrels a day of condensates from the Dorra offshore field, located in Gulf waters in the Saudi-Kuwait Neutral Zone.

    Ownership of the field is disputed by Iran, which refers to the field as Arash.

    Iran claims the field partially extends into Iranian territory and asserts that Tehran should be a stakeholder in its development.

    It is believed that the Dorra field’s close proximity to Iran will make development difficult due to the current security environment.

    The offshore elements of the project are expected to be especially difficult to protect from attacks from Iran.

    In July last year, MEED reported that KGOC had initiated the project by launching an early engagement process with contractors for the main engineering, procurement and construction tender.

    France-based Technip Energies completed the contract for the front-end engineering and design.

    READ THE APRIL 2026 MEED BUSINESS REVIEW – click here to view PDF

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16413221/main.png
    Wil Crisp
  • Iraq pushes to revive oil pipeline through Saudi Arabia

    16 April 2026

    Iraq is pushing to revive an oil pipeline that passes through Saudi Arabia, allowing it to diversify export routes.

    Saheb Bazoun, a spokesman for Iraq’s Oil Ministry, said the pipeline would help to insulate Iraq from any future blockades of the Strait of Hormuz, which has been largely closed since 28 February.

    The original pipeline through Saudi Arabia has not been used for more than 30 years and would need work to be done in order to bring it online.

    It is 1,568km long, extending from the city of Zubair in Iraq to the Saudi port of Yanbu on the Red Sea.

    The pipeline was built in two phases during the 1980s. The first phase stretches between Zubair and Khurais, while the second extends to Yanbu. The pipeline’s operating capacity reached over 1.6 million barrels a day (b/d).

    Following the Gulf War, the pipeline was shut down in August 1990. It has remained out of operation for decades, despite Iraq’s several attempts to restart it.

    The original pipeline project cost over $2.6bn, including storage tanks and loading terminals.

    In the wake of the US and Israel attacking Iran on 28 February, global markets have lost 11 million barrels a day (b/d) of oil supply due to the effective closure of the Strait of Hormuz.

    READ THE APRIL 2026 MEED BUSINESS REVIEW – click here to view PDF

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16413290/main.jpg
    Wil Crisp
  • Algeria opens bidding for water treatment plant

    15 April 2026

     

    State-owned Cosider Pipelines, part of Algeria’s public infrastructure group Cosider, has issued a tender for the construction of a demineralisation plant in In Salah in Algeria.

    The contract covers the design, supply, installation, testing and commissioning of a plant with a treatment capacity of 62,000 cubic metres a day (cm/d).

    The tender is open to local and international companies specialising in the design and construction of demineralisation and reverse osmosis desalination plants.

    The bid submission deadline is 26 April.

    The project will be located at In Salah, a key industrial area in southern Algeria, where treated water supply is important for both municipal and industrial use.

    Cosider said that individual bidders must demonstrate that they have completed at least one reverse osmosis demineralisation or desalination plant with a capacity of 20,000 cubic metres a day or more.

    They must also show an average annual turnover of at least AD1bn ($7.7m) for their five best years over the past decade.

    For consortium bids, all partners must share full responsibility for the contract, while the lead company must meet the technical and financial requirements.

    Recent projects

    In 2023, MEED reported that Riyadh-based water utility developer Wetico had won two contracts to develop water desalination plants in Algeria.

    Societe Algerienne de Realisation de Projects Industriels (Sarpi) awarded the contract for the El-Tarf desalination plant, while Entreprise Nationale de Canalisations (Enac) is the client for the Bejaja facility.

    Both plants were commissioned in 2025, each with a production capacity of 300,000 cm/d.

    Separately, Wetico was the main contractor on a third plant commissioned last year. The Cap Dijinet 2 seawater desalination plant in Boumerdes province covers 18 hectares and also has a capacity of 300,000 cm/d.

    Like many countries, Algeria is facing pressure on resources due to longer and more frequent droughts. Seawater desalination is seen as a key driver of the government’s strategy to guarantee drinking water supply.

    According to previous reports, the government is planning to build up to six additional plants by 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16404325/main.jpg
    Mark Dowdall
  • WEBINAR: UAE Projects Market 2026

    15 April 2026

    Webinar: UAE Projects Market 2026
    Tuesday, 28 April 2026 | 11:00 GST  |  Register now

    Agenda:

    • Overview of the UAE projects market landscape
    • 2025 projects market performance
    • Value of work awarded 2026 YTD
    • Impact of the Iran conflict on the projects market and real estate, assessing supply chain disruptions, material cost inflation and war risk premiums
    • Key drivers, challenges and opportunities
    • Size of future pipeline by sector and status
    • Ranking of the top contractors and clients
    • Summary of key current and future projects
    • Short and long-term market outlook
    • Audience Q&A

    Hosted by: Colin Foreman, editor of MEED 

    Colin Foreman is editor and a specialist construction journalist for news and analysis on MEED.com and the MEED Business Review magazine. He has been reporting on the region since 2003, specialising in the construction sector and its impact on the broader economy. He has reported exclusively on a wide range of projects across the region including Dubai Metro, the Burj Khalifa, Jeddah Airport, Doha Metro, Hamad International airport and Yas Island. Before joining MEED, Colin reported on the construction sector in Hong Kong.

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16401868/main.gif
    Colin Foreman