The government has proposed a law to privatize most of Kuwait’s industries, except for the Army, Police, and the Oil industry. The law would entitle the government to a 20% stake in the newly established companies, while a strategic partner would own 35%, employees own 5%, and the public would retain the remaining 40% stake. The law is being discussed in the parliamentary Financial Committee.
This law, if it passes and sees the light of day, is a huge step for Kuwait in the right direction, in our opinion. The new entities will be more efficient, specialized, lacking corruption, with clear goals, and accountable for their actions. Let us look at the Ministry of Electricity and Water Power as an example. If they privatize electricity, people will start to own up to their responsibilities and pay their bills. If they don’t, then the company will cut their electricity, unlike what is happening nowadays. This change will make people more accountable for the responsibilities and will improve people’s morality and ethical standards.
When Kuwait’s industries are put for sale, it will lead to a huge influx of foreign capital into Kuwait because 35% of these companies will be owned by specialized partners. A foreign electricity company might collaborate with a Kuwaiti partner to establish a Kuwaiti electricity company. The foreign companies will bring their expertise in that area, as well as their capital.
The government clearance of these industries that require routine work and constant Parliamentary headaches will lead the government to focus on more meaningful ventures, and work on establishing long-term plans and actually implementing them.
(1 votes, average: 5.00 out of 5)
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The problem is the application of the law, not in the ownership structure.
PWC (Agility) was privitaized back in 1997, and we have yet to know if the average Kuwaiti has gotten better service or lower prices (they actually raised their prices on leases while still paying the government pennies)
I dont trust this governemnt one freaking bit
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Naser Reply:
February 10th, 2010 at 2:54 pm
PWC is a bit different than say the Postal Service or the Electric Company, as everyone in Kuwait has to do business with the last two, but PWC entracts with businesses. No one will disagree about how horrible the postal service and electricity service here in Kuwait. So privatization will elminate these ineffeciencies and hopefully lead to better establishments. Privatization has worked all over the world including the UK in 1980’s (Britsh Airways), Eastern Europe in the 1990’s, and China and India in the 2000’s
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The U.S Postal is still owned by the government, so was the Japanese Post Office (till very recently)….there are many other examples … UAE’s Post Office.. etc.
I don’t buy into this simplicity of Privatization = better service or better prices. especially in Kuwait, unless it is something where you can make it competitive .. and you can’t do that to the Post Office nor the Electricity….its just a way to fatten the fat cats even more…..if you want good service, then have better management and better accountability……
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