Meed | Kuwait navigates unchartered political territory

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

Exclusive from Meed

Abu Dhabi mends fences with Riyadh
9 October 2026
Abu Dhabi mends fences with Riyadh
9 October 2026
Adnoc secures Thailand LNG supply deal
9 October 2026
Fibrex wins $217m Abu Dhabi Seamont residences contract
9 October 2026
Dubai picks contractor for Al-Maktoum airport terminal
9 October 2026

Abu Dhabi mends fences with Riyadh
9 October 2026

Ongoing political turmoil in the region may be prompting Abu Dhabi to review its approach to key diplomatic issues, not least its relations with its larger neighbour, Saudi Arabia.

In late September, UAE Vice-President Sheikh Mansour Bin Zayed Al-Nahyan travelled to Riyadh for talks with Crown Prince Mohammed Bin Salman and Defence Minister Prince Khalid Bin Salman. Such visits may have been commonplace in the past, but over the past year they have been relatively rare, given the friction between the two Gulf powers over issues such as the conflict zones of Yemen and Sudan, relations with Israel and economic rivalry.

At the start of the year, the UAE retreated from Yemen under pressure from Riyadh, after the UAE-backed Southern Transitional Council made rapid territorial gains at the expense of Saudi-backed groups and advanced close to the kingdom’s southern border.

Since then, against the backdrop of the Iran war, relations have shown further signs of strain, with cross-border financial transactions reportedly being blocked or delayed.

However, there have been intermittent attempts to present a more collegial relationship, such as in July, when a photo emerged on social media of Sheikh Mansour and Prince Khalid posing with their arms around each other, reportedly while on holiday in Europe.

Yemen dynamics

Gains by another group in Yemen may lie behind the latest rapprochement between Riyadh and Abu Dhabi. The visit by Sheikh Mansour on 29 September came in the wake of significant advances by the Houthis, who had recently captured Mokha port and strategically significant areas of land overlooking the Bab El-Mandeb Strait – heightening their ability to menace passing ships.

Saudi Arabia has been leaning on its allies – particularly Pakistan and Turkiye – to support its campaign against the Houthis. It is unclear whether the UAE would be willing to get involved militarily in Yemen again, or whether Riyadh would be happy for it to do so, but it could still be a useful ally in the fight. Analysts have noted that UAE-backed forces have, over the years, had a far greater record than anyone else of scoring battleground victories against the Houthis.

It is also notable that Mansour’s delegation to Riyadh included several senior security officials, including Ali Bin Hammad Al-Shamsi, secretary general of the Supreme Council for National Security; Ali Saeed Matar Al-Neyadi, chairman of the National Emergency, Crisis and Disaster Management Authority; and Nasser Humaid Al-Nuaimi, secretary general of the Tawazun Council for Defence Enablement.

The visit was a surprise, given the GCC states’ lack of unified action this year amid the crises in Yemen and Iran. Speaking at an event in Washington in mid-September, Bernard Haykel, professor of Near Eastern Studies at Princeton University, noted that: “Despite the fact that [the GCC states] all face a common threat in Iran and its proxies, you still don’t see real coordination between them. You still have these differences between the Saudis and the UAE, for instance; you have differences between the Qataris and the UAE. If anything would have united them, this would be it. And you don’t see that kind of unity.”

Writing for the Arab Gulf States Institute in early October, Kristian Coates Ulrichsen, a Baker Institute fellow for the Middle East at Rice University, said Mansour’s visit to Riyadh in late September was “likely meant to signal that the thaw [in bilateral relations] was real” and “designed to enable a more coordinated approach to managing the forces ranged against the Houthis in southern and central Yemen”.

Further signs of warming ties came on 8 October, when UAE Investment Minister Mohamed Hassan Alsuwaidi signed a memorandum of understanding with Saudi Industry and Mineral Resources Minister Prince Abdulaziz Bin Salman covering power grid interconnections, trade in electricity and freight rail connectivity.

On the same day, the Saudi ambassador to the UAE invited President Sheikh Mohamed Bin Zayed Al-Nahyan to attend a GCC-EU Summit in Saudi Arabia later in the month.

Sheikh Mansour was not the only senior Emirati on diplomatic manoeuvres in recent weeks. The day after the vice-president was in Riyadh, national security adviser Sheikh Tahnoun Bin Zayed Al-Nahyan was in Muscat for talks with Sultan Haitham Bin Tariq Al-Said.

Oman is a critical partner for the UAE in several areas. Omani ports have provided a trade lifeline for Emirati importers and exporters at a time when ports in Dubai and Abu Dhabi have been sidelined by Iran’s threats against shipping through the Strait of Hormuz. Muscat’s approach of maintaining dialogue with all actors means it is also able to mediate with both Iran and Yemen’s Houthis.

Strategic independence

The flurry of diplomatic activity may be a sign of closer coordination between the UAE and its neighbours on some critical issues, but that does not necessarily herald a sea change in its approach.

Speaking at the UN General Assembly in New York on 28 September, Minister of State Khalifa Shaheen Al-Marar reviewed the crises in Iran, Sudan, Gaza, Ukraine and elsewhere and said “the importance of developing and reforming regional and international multilateral institutions … remains paramount” – but while he name-checked the UN, he did not mention the GCC.

It is also notable that the UAE has not yet joined either of the two security initiatives launched by Saudi Arabia during the summer: a maritime defence alliance designed to protect shipping in the Red Sea, or a mutual defence pact that Riyadh signed with Turkiye and Pakistan.

In his speech to the UN, Al-Marar listed what he saw as the main pillars of the UAE’s national strength: “strategic independence” was the first item in his list.

https://image.digitalinsightresearch.in/uploads/NewsArticle/20435670/main.gif

Dominic Dudley
Abu Dhabi mends fences with Riyadh
9 October 2026

Ongoing political turmoil in the region may be prompting Abu Dhabi to review its approach to key diplomatic issues, not least its relations with its larger neighbour, Saudi Arabia.

In late September, UAE Vice-President Sheikh Mansour Bin Zayed Al-Nahyan travelled to Riyadh for talks with Crown Prince Mohammed Bin Salman and Defence Minister Prince Khalid Bin Salman. Such visits may have been commonplace in the past, but over the past year they have been relatively rare, given the friction between the two Gulf powers over issues such as the conflict zones of Yemen and Sudan, relations with Israel and economic rivalry.

At the start of the year, the UAE retreated from Yemen under pressure from Riyadh, after the UAE-backed Southern Transitional Council made rapid territorial gains at the expense of Saudi-backed groups and advanced close to the kingdom’s southern border.

Since then, against the backdrop of the Iran war, relations have shown further signs of strain, with cross-border financial transactions reportedly being blocked or delayed.

However, there have been intermittent attempts to present a more collegial relationship, such as in July, when a photo emerged on social media of Sheikh Mansour and Prince Khalid posing with their arms around each other, reportedly while on holiday in Europe.

Yemen dynamics

Gains by another group in Yemen may lie behind the latest rapprochement between Riyadh and Abu Dhabi. The visit by Sheikh Mansour on 29 September came in the wake of significant advances by the Houthis, who had recently captured Mokha port and strategically significant areas of land overlooking the Bab El-Mandeb Strait – heightening their ability to menace passing ships.

Saudi Arabia has been leaning on its allies – particularly Pakistan and Turkiye – to support its campaign against the Houthis. It is unclear whether the UAE would be willing to get involved militarily in Yemen again, or whether Riyadh would be happy for it to do so, but it could still be a useful ally in the fight. Analysts have noted that UAE-backed forces have, over the years, had a far greater record than anyone else of scoring battleground victories against the Houthis.

It is also notable that Mansour’s delegation to Riyadh included several senior security officials, including Ali Bin Hammad Al-Shamsi, secretary general of the Supreme Council for National Security; Ali Saeed Matar Al-Neyadi, chairman of the National Emergency, Crisis and Disaster Management Authority; and Nasser Humaid Al-Nuaimi, secretary general of the Tawazun Council for Defence Enablement.

The visit was a surprise, given the GCC states’ lack of unified action this year amid the crises in Yemen and Iran. Speaking at an event in Washington in mid-September, Bernard Haykel, professor of Near Eastern Studies at Princeton University, noted that: “Despite the fact that [the GCC states] all face a common threat in Iran and its proxies, you still don’t see real coordination between them. You still have these differences between the Saudis and the UAE, for instance; you have differences between the Qataris and the UAE. If anything would have united them, this would be it. And you don’t see that kind of unity.”

Writing for the Arab Gulf States Institute in early October, Kristian Coates Ulrichsen, a Baker Institute fellow for the Middle East at Rice University, said Mansour’s visit to Riyadh in late September was “likely meant to signal that the thaw [in bilateral relations] was real” and “designed to enable a more coordinated approach to managing the forces ranged against the Houthis in southern and central Yemen”.

Further signs of warming ties came on 8 October, when UAE Investment Minister Mohamed Hassan Alsuwaidi signed a memorandum of understanding with Saudi Industry and Mineral Resources Minister Prince Abdulaziz Bin Salman covering power grid interconnections, trade in electricity and freight rail connectivity.

On the same day, the Saudi ambassador to the UAE invited President Sheikh Mohamed Bin Zayed Al-Nahyan to attend a GCC-EU Summit in Saudi Arabia later in the month.

Sheikh Mansour was not the only senior Emirati on diplomatic manoeuvres in recent weeks. The day after the vice-president was in Riyadh, national security adviser Sheikh Tahnoun Bin Zayed Al-Nahyan was in Muscat for talks with Sultan Haitham Bin Tariq Al-Said.

Oman is a critical partner for the UAE in several areas. Omani ports have provided a trade lifeline for Emirati importers and exporters at a time when ports in Dubai and Abu Dhabi have been sidelined by Iran’s threats against shipping through the Strait of Hormuz. Muscat’s approach of maintaining dialogue with all actors means it is also able to mediate with both Iran and Yemen’s Houthis.

Strategic independence

The flurry of diplomatic activity may be a sign of closer coordination between the UAE and its neighbours on some critical issues, but that does not necessarily herald a sea change in its approach.

Speaking at the UN General Assembly in New York on 28 September, Minister of State Khalifa Shaheen Al-Marar reviewed the crises in Iran, Sudan, Gaza, Ukraine and elsewhere and said “the importance of developing and reforming regional and international multilateral institutions … remains paramount” – but while he name-checked the UN, he did not mention the GCC.

It is also notable that the UAE has not yet joined either of the two security initiatives launched by Saudi Arabia during the summer: a maritime defence alliance designed to protect shipping in the Red Sea, or a mutual defence pact that Riyadh signed with Turkiye and Pakistan.

In his speech to the UN, Al-Marar listed what he saw as the main pillars of the UAE’s national strength: “strategic independence” was the first item in his list.

https://image.digitalinsightresearch.in/uploads/NewsArticle/20432716/main.gif

Dominic Dudley
Adnoc secures Thailand LNG supply deal
9 October 2026

Abu Dhabi National Oil Company (Adnoc) has secured a deal with Thailand-based energy and infrastructure company Gulf Group to supply 2 million tonnes a year of liquefied natural gas (LNG), with deliveries starting in 2027.

The multi-year sale and purchase agreement (SPA), whose exact duration Adnoc did not disclose, builds on an initial LNG supply deal agreed between the two companies last year. The transaction was arranged through Adnoc’s integrated LNG marketing and trading platform, which was established in July within Abu Dhabi Global Market.

The hub integrates the marketing operations of Adnoc subsidiaries Adnoc Gas and XRG with the trading activities of Adnoc Trading. It targets a combined portfolio of 47 million t/y of marketable LNG by 2035. Adnoc Trading has developed an active third-party trading portfolio over the past four years, operating from commercial offices in Abu Dhabi, Singapore and Geneva.

ALSO READ: Adnoc signs energy agreements with Japan and South Korea

Separately, Adnoc has secured offtake commitments covering approximately 90% of the 9.6 million-t/y capacity planned for its low-carbon Ruwais LNG project.

In July, Adnoc signed a 15-year SPA with Japan’s Inpex Corporation for the supply of up to 1 million t/y from Ruwais. That contract marked Adnoc’s third long-term Ruwais supply agreement with a Japanese buyer, following deals with Osaka Gas and Mitsui & Co in March and April 2025, respectively. Together, the agreements with the three Japanese firms account for 2.4 million t/y – one-quarter of the terminal’s total capacity, which will be delivered across two 4.8 million-t/y liquefaction trains.

Adnoc has also secured long-term Ruwais LNG supply agreements with Malaysia’s Petronas, Germany’s EnBW Energie Baden-Wurttemberg and SEFE (Securing Energy for Europe), China’s ENN Natural Gas, UK-based Shell and Indian Oil Corporation.

Currently under construction in Ruwais Industrial City, Abu Dhabi, the facility is scheduled to begin commercial operations in 2028. Its commissioning will more than double Adnoc’s LNG production capacity to approximately 15 million t/y.

https://image.digitalinsightresearch.in/uploads/NewsArticle/20421415/main4048.jpg

Indrajit Sen

Fibrex wins $217m Abu Dhabi Seamont residences contract

9 October 2026

Register for MEED’s 14-day trial access

Abu Dhabi-based contractor Fibrex Construction Group has won an AED800m ($217m) contract to build the Seamont Autograph Collection Residences project, located on Al-Reem Island in the UAE capital.

Abu Dhabi-based real estate developer Royal Development Holding, a subsidiary of Emirates Stallion Group, and local firm Saas Properties awarded the contract.

The development comprises two 22-storey towers offering 497 residences, ranging from one- to four-bedroom apartments.

The construction programme is scheduled to run for 27 months, with completion due in December 2028.

Fibrex will begin mobilisation immediately, following the completion of enabling works this month, which were undertaken by Sharjah-based Swiss Pro Foundations.

Dubai-based architectural firm Dewan Architects & Engineers is the project consultant.

The contract marks another major win for the contractor. Last year, Dubai-based developer Nakheel awarded Fibrex a AED2.6bn ($708m) contract to build the Bay Villas project at Dubai Islands.

That contract includes the construction of 636 villas.

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

Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

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

> AGENDA: Oxagon takes centre stage at Neom

> MARKET FOCUS: Saudi projects hold steady

> INDUSTRY REPORT: MEED’s 2026 GCC power developer ranking

> POWER: AI is creating a grid capacity problem

> LEGAL: What IFAD’s wind-down means for Gulf commodity markets

> OIL: Oil companies focus on North Africa amid Hormuz crisis

> LEADERSHIP: The future city does not need to hang above the ground

To see previous issues of MEED Business Review, please click here

https://image.digitalinsightresearch.in/uploads/NewsArticle/20420509/main.jpg

Yasir Iqbal

Dubai picks contractor for Al-Maktoum airport terminal

9 October 2026

Dubai Aviation Engineering Projects (DAEP) has selected a contractor for an estimated AED10bn ($2.7bn) substructure package for the West Terminal, as part of the first phase of the $35bn expansion of Al-Maktoum International airport.

A joint venture of Beijing-headquartered China Civil Engineering Construction Corporation (CCECC) and Abu Dhabi-based Tristar Engineering & Construction will execute the contract.

According to a description on DAEP’s website, the expanded airport’s West Terminal will be a seven-level facility spanning 800,000 square metres, with annual capacity for 45 million passengers.

The terminal will be the second of three planned terminals at Al-Maktoum International airport. It will connect to the airside via a 14-station automated people-mover (APM) system.

In July, MEED exclusively reported that DAEP had awarded an estimated $1.5bn contract to a joint venture of Japan’s Mitsubishi Corporation and Indian contractor Larsen & Toubro for the APM system.

The APM will run beneath the apron and terminal areas, using multiple tracks to transport passengers between terminals and concourses. Four underground stations are planned in the first phase, while the full airport development is expected to include 14 stations.

The latest awards form part of a wider programme of contracts recently signed by DAEP, covering enabling works, the second runway, initial structural foundations for passenger terminals and concourse substructures.

Upcoming awards

In June 2026, DAEP said it will award construction contracts worth over AED55bn ($15bn) for Al-Maktoum International airport by the end of the year.

At the time, DAEP said the planned awards included substructure works for the West Terminal, the fourth aircraft concourse and the baggage-handling system. The programme also included superstructure works for the West Terminal and the first, second and third aircraft concourses.

The packages are expected to include long-span structural frameworks for buildings covering about 1.5 million square metres, infrastructure works for the southern airfield area, and power-generation and district-cooling plants supporting the construction programme.

DAEP also plans to award façade and roofing packages in 2026.

The Dubai Government approved updated designs and timelines for its largest construction project in April 2024. In September 2024, MEED exclusively reported that a team comprising Austria’s Coop Himmelb(l)au and Lebanon’s Dar Al-Handasah had been confirmed as lead masterplanning and design consultants for the Al-Maktoum International airport expansion.

Construction of the airport is planned in three phases. Once complete, the airport will cover 70 square kilometres south of Dubai and include five parallel runways and 430 aircraft gates.

It will be five times the size of Dubai International airport and is planned to have a passenger-handling capacity of 260 million passengers a year – the largest in the world. For cargo, it is planned to have the capacity to handle 12 million tonnes a year.