Thursday, 15 November 2012

Kuwaiti political turmoil worsens before Dec 1 polls

REUTERS KUWAIT TO gauge the impact of Kuwait’s political deadlock on its economy, access the Internet with a fixed-line broadband connection. The line is slow, very slow - half the speed of a connection in other wealthy Gulf Arab states, according to a very senior telecommunications executive.

The ministry of communications owns and operates the country’s fixed-line infrastructure, with the four major Internet service providers paying the government to use it.

But the largely copper-based network cannot carry enough bandwidth to satisfy consumer demand, according to Essa al Kooheji, general manager at Qualitynet, which has an estimated 45 percent market share for fixed-line Internet.

Only about 15 percent of fixed-line broadband connections in the country use faster fibre optic lines, which are relatively common elsewhere in the Gulf, Kooheji said.

“We receive lots of calls from customers who want to upgrade and take the maximum speed for the price available, but they cannot do so,” he told Reuters in September. “The government should put more effort into improving the telecom infrastructure rather than cutting prices.” For many businessmen, Kuwait is a frustrating contradiction: a fabulously rich country which is economically backward. And the gap between its wealth and its level of development appears to be widening.

As the country’s political tensions have worsened in the last several months, prompting authorities to dissolve parliament and call snap elections for December 1, businessmen have increasingly worried that the political system has become unable to address the economic problems.

A chorus of executives has publicly criticised the government’s economic management, a rare phenomenon in a region where the business community prefers to lobby authorities discretely behind the scenes.

Kuwait’s oil wealth gives the country of about 3.7 million people, including 1.2 million Kuwaiti citizens, a per capita gross national income of about $50,000, among the ten highest in the world and the second highest in the Gulf after Qatar.

But its creaking infrastructure, unfriendly business climate and near-total dependence on oil put Kuwait at a much lower level in terms of the sophistication and dynamism of its economy - especially compared to its Gulf neighbours, which are working harder to upgrade their infrastructure and diversify their economies through private sector investment.

“Kuwait’s economy needs upgrading and investment, from the upstream wells to the refineries, from basic infrastructure to healthcare,” said Farouk Soussa, M-E chief economist at Citigroup in Dubai. Unfinished buildings dot the skyline, with piles of rubble and trash left uncleared in residential areas for month.

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