Research and analysis

Kuwait - Visit of the Lord Mayor of London

Published 28 January 2015

This research and analysis was withdrawn on

This publication was archived on 5 August 2016. This article is no longer current. Please refer to Overseas Business Risk - Kuwait.

0.1 This publication was archived on 4 July 2016

This article is no longer current. Please refer to Overseas Business Risk - Kuwait

0.2 Summary

Lord Mayor delivers strong message that Britain is open for business and has the skills and expertise to compete. Busy programme sees Lord Mayor attend Britain in Kuwait trade exhibition, address Kuwait Chamber of Commerce and Industry, deliver a speech at a reception for Kuwaiti and British business representatives, make calls on the former Prime Minister, Minister of Finance, Minister of Communications, Minister for Cabinet Affairs and Central Bank Governor and sign an MOU with the Capital Markets Authority. Positive visit, well received. Kuwaiti hosts offer a predictably warm welcome.

0.3 Detail

The Rt Hon The Lord Mayor of London, Alderman Alan Yarrow, visited Kuwait from 16-19 January. He carried out a full programme, well-supported throughout by his Kuwaiti hosts. Key points as follows:

Britain in Kuwait

The private organisers of the 9th Britain in Kuwait exhibition had scheduled the event to coincide with the Lord Mayor’s visit. The Ambassador joined former Prime Minister Sheikh Nasser Mohammed for the official opening on 14 January, which included over 40 British and Kuwaiti companies with British interests representing the hydrocarbon sector (BP), motor industry (Jaguar/Bentley), education (British council), healthcare (HCA), food and drink (Tesco) and security sectors (G4S) and a number of property developers and investment houses and the softer side of UK interest in Kuwait – our schools, societies and NGOs. The Lord Mayor toured the exhibition on the final evening, visiting the Embassy stand and meeting all the exhibitors. The organisers believe some 2000 visitors attended over the three days, but the real impact was achieved through extensive media and social media coverage..

Business breakfast

On 17 January the Lord Mayor met members of the Ambassador’s Club business group.Senior British business representatives had differing attitudes to the Kuwait market. Those working with private and public companies operating in the hydrocarbon sector remain positive.. . For others working with Kuwaiti Government ministries, the situation is harder going, with many reporting continued frustrations especially around cancelled or postponed projects..
Kuwaiti bankers, business leaders and financial services representatives

Engagements with leading Kuwaiti bankers, business leaders and financial services leaders focused on London’s position as the world’s financial capital and recent developments involving the Swiss franc, the continuing fall in the oil price and implications for Kuwait’s budget and National Development Plan. Interlocutors were broadly positive. The Kuwait Chamber of Commerce bemoaned the relative decline in the presence of UK businesses operating in Kuwait over the last twenty years. The Lord Mayor was able to highlight not only our increasingly competitive position in the services sector, but also to note the increase in bilateral trade volumes (driven in many instances by the success of UK retailers) and to add that UK engineering companies were still in the market and eager to compete for business, and in many cases were succeeding.

The Lord Mayor also called on Kuwait Finance House (the second largest bank in Kuwait and 100 per cent sharia compliant). The conversation revealed some interesting social trends and Kuwaiti attitudes to Islamic Finance. KFH studies have revealed that some 22% of the population only want sharia products, 60% are flexible and keenly focussed on service and price, while the remainder do not appear to have any real interest in Islamic finance, preferring conventional banking. . The Lord Mayor noted the moves the City of London had made to offer sharia-compliant products, but observed that take up had been lower than expected. KFH officials appeared to acknowledge that, until more price-competitive, Islamic finance looked likely to remain a niche market, and speculated that the City’s experience could be because prices were high due to London overheads and a relatively small pool of customers leading to a lack of economies of scale.

Ministers of Finance, Communication and Cabinet Affairs and Central Bank Governor

During the Lord Mayor’s call on Minister of Finance , the Minister confirmed the Government’s clear intention to press ahead with major developmental and infrastructure projects as part of the National Development Plan. Falling oil revenues were presenting some new challenges for the Government, though it was not envisaged that any major projects would be cancelled..

The Ministry of Communications (Transport) is responsible for the key GCC Rail and Kuwait Metro projects (two of our HVOs). However, following meetings at the Ministry the cuurent status of of these major projects remains unclear. . In-house tender and a short list have been prepared to invite expressions of interest from consultants. Meanwhile, the local Arab News newspaper reported on 21 January that Kuwait Municipality has approved phase one of the GCC railway. However, when the Lord Mayor met senior interlocutors for lunch at the National Bank of Kuwait on 19 January they argued that the GCC rail initiative was an “unnecessary vanity project” with no real need..

During a call on the Minister of State for Cabinet Affairs , the Minister touched on Kuwait’s continuing interest in investing in the City and in the UK more broadly.. However, the Minister made it clear that Kuwait was not interested in green-field development projects, and we should expect a continuing focus on safe investments with good guaranteed returns..

Mansion House Scholarship

Addressing an audience of Kuwaiti and UK businesses at an evening reception, including a visiting delegation from the UK’s Energy Industries Council, the Lord Mayor announced the proposal to award a new Mansion House Scholarship to support further professional education for a high-flying young Kuwaiti working in the banking and financial services sector. The Embassy and British Council are now working with Mansion House officials to invite applications and identify a successful scholar.

0.4 Comment

This was a well-received visit which reaffirmed our continuing engagement with senior Kuwaitis and has helped to reassure them of the UK’s engagement and interest in further developing both the trade and investment relationship. . The award of a new Mansion House Scholarship has already attracted positive coverage. Tthe signing of the MOU between the Chartered Institute of Securities and Investment and the newly established Capital Markets Authority headed by the former Minister of Finance is a significant outcome for the Lord Mayor’s visit which will not only help educate and train Kuwaitis but further extend our influence across the Kuwaiti financial services sector.

0.5 Disclaimer

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