Out Of Office

I am traveling oceans across to the land faraway.

Check back in two weeks.

Telephone Issues

One of the first things that I wrote about after I moved to Kuwait was about the cost of keeping in touch, and the ban on VOIP services in Kuwait. A news piece in today’s paper states that some of the websites that had been blocked by the Ministry of Communication are now accessible. There has been no change in the law regarding the ban on these services, therefore, the question that begs an answer is why are these services been made accessible.

Communications is a large cost attached to doing business in a country. Many companies use VOIP services for their international calls. Therefore, given the fact that these call are not available is a huge problem. The other thing Ministry of Communication needs to look into is setting up an infrastructure which allows companies to set up conference calls with dial in for various parties across the globe. Large number of local multinational businesses rely on their counterparts to set up these conference calls, and Kuwait companies run very high costs, which makes them less competitive. These are definitely small things but there is a need to look at these things in greater detail given the change in tax regime in Kuwait, which has made Kuwait, compared to before, an attractive market.

Long Time, No Write

I know that I haven’t written for a very long time, but neither has Shakespeare! I don’t hear many complaints about that one. (I know it is a stale joke) I frankly do not even hear any complaints about not me not writing. There are many reasons I have not written, firstly, I ran out of thing to say about Kuwait. I found that novelty of the place had ran out, and I did not have much to add about the place. It is not to say that there has not been much happening in Kuwait, but nothing which lends itself significance.

However, I am wrong. There is much happening in Kuwait. Kuwait is going through its biggest internal political crisis of the decade (I say internal because Iraq war had repercussions for Kuwait). Kuwait Parliament has been dissolved and the elections will be held in middle of the next month. The Parliament was dissolved because of the non co-operation between the Cabinet and the Parliament. The elections in many way will determine whether Kuwait will be able to keep in the race with other GCC countries in development and economical growth.

Kuwaiti government has been trying to make the market conditions favorable for foreign investors. The government has lowered the tax rate for foreign shareholders, which hopefully will attract many more investors. However, many feel that this is not enough, and there is more that needs to be done to attract foreign investors. I do not intend to make my this post about what needs to be done in Kuwait to attract foreign capital.

Nevertheless, I do want to touch on a very bizarre phenomena I witnessed this weekend. American University of Kuwait (”AUK”) had organized a Restaurant festival on its campus. Needless to say that this is the first time I had been to a Restaurant festival organized at a university campus. It was extremely sad in many ways, as it was clear that the students had talent and resources to raise funds and get sponsors, which is a huge problem in organising any university function. However, their talent was being completed wasted. There was no political or cultural atmosphere at the event. It was sad to see that these young people, who will be joining the work force soon were wasting their lives at a festival of gluttony, when their country was going through a political crisis.

Ramadan

Like most Muslim countries, the holy month of Ramadan is observed in Kuwait with a lot of zeal.

Firstly, unlike in western countries, working hours change to adapt to the Su’hr and Iftar times. That is great, since in western countries one can easily work through iftar because of no recognition of the fact that one is fasting. The other great thing is shorter working day. yay! One would also get off for eid! yay! yay!

Few things to keep in mind are:

(1) All the restaurants are closed during the fasting time
(2) Eating/Drinking is completely forbidden in public and is against the law
(3) People are running low on sugar, and can get short tempered very very quickly
(5) Most restaurants have buffet system for su’hr and iftar
(4) Most shops are open until late
(5) It is better to get Eid Shopping out of the way earlier rather than later

Ramadan Mubarak!

MTC: Commercial Decision

It has been speculated in the newspapers that MTC was leaving Kuwait because of non-investor friendly laws in the Country. Saad Al-Barrak said in his interview that the MTC departure from Kuwait “is a commerical decison“. One needs to understand the reason behind commerical decision, if investment market is going to be made attractive in Kuwait. He said the plan is to make MTC an “international company” and list it in European stock markets. This is all well and good. However, the question still remains, why does MTC feel that it cannot become a global player staying in Kuwait. Is the Kuwaiti market not lucrative for business compared to other Middle Eastern Country? (Kuwait is one of the larger stock markets in Middle East!) Is the investment enviroment not friendly?

Kuwaiti market, investment policy, investment enviroment are all controlled by laws of the country. MTC may try and word it in whatever ways it like, but, all being said and done it has to be the investment laws for it to consider Kuwait not suitable for its commerical growth.

Kuwait Calling, People Not Coming!

Kuwait is holding a World Travel Expo in 2008, the idea of the exhibition is to not only promote international tourism to Kuwaiti market but promote Kuwait as a tourist spot to international market. However, the recent list published by the The Times (UK) of best Middle East Breaks, Kuwait was no where to be seen. In order to promote tourism in Kuwait, the Kuwaiti market would need to become more friendlier and attractive to foreign tourist. Unfortunately, right now Q8 does not offer much to international tourists in terms of entertainment.

Most ppl when going on holiday want to relax, have fun and party. However, there are very few options for any of those available in Q8. Alcohol is illegal, as are clubs & dancing, a couple can be stopped by police and asked to prove that they are married, non-married couples cannot travel together or live together on vacations as it is illegal, the movies are censored (interestingly not for violence or foul language, but a peck).

The irony of the situation is most Kuwaitis (for whose benefit the law actually exists or is technically suppose to represent their will) leave the country, practically every weekend, for other middle eastern countries to engage the above mentioned “illegal” activities in Kuwaiti. Kuwaiti society needs to realise that it needs to change in order to attract tourism, right now it is even losing the corporate income to other middle eastern countries.

Need it, Want it, But Don’t Want To Get It

I am sure most residents in Kuwait at some point had to get a Civil ID and a Driving License. I am unfortunately no exception to the rules. So you do what you have to do or rather kind people at your work do what they have to do. In Kuwait, I learned very quickly that you cannot work through the maze of bureaucracy without having a mandoop (sp?)(the person who guides you through the ministerial maze) and wasta (who you know).

I have to say Mandoop at my work place are excellent. They know everything, they know how to take care of it and make sure you are not harassed unnecessarily. However, dear lord, it is a mess. It takes about three weeks to 3 months for your civil id to come through depending on where you have wasta. It requires finger printing at one place, blood test and x-ray at another and then the long waiting time, and afterwards you go collect your civil id at another place. Would it not make sense to have all these things at one place? I guess it wouldn’t because then i wouldn’t be living in Kuwait.

Driving License is another nightmare, and takes ages. I actually have a license from my home country, which is recognised in Kuwait. Therefore, it was just a matter of getting the license transferred but that also takes a very, very long time. First you start with getting it translated and authenticated at the embassy, then ministry of justice here notarizes it, then ministry of transportations approves it, after which you need to get blood test done to determine your blood group (it doesn’t matter that you know your blood group), then you need to go to another hospital where you get your eyesight checked, thereafter, back to the driving license office - where do the whole process of verifying zillions of documents and then you can obtain your license. Needless, to say that all these process are necessary, however, will it not be better utilisation of time, money and resources to have all these departments needed for obtaining a license in one place?

Anyway, now I have both the documents and I guess I am being Kuwaitised and will soon be driving like them.

I secretly hope not.

Tax- yup in Kuwait

I had mentioned in an earlier post that the Kuwaiti government is thinking of imposing income tax in Kuwait. Yesterday, Amir stated that it may be necessary at some stage to enforce tax in Kuwait:

“The service provided to nationals comes at a very high cost which can be shouldered by the state for some time but not all the time. There will come a day when the state will find itself obliged to impose taxes,”

I guess now we are just counting days.

Kuwait Losing Out

On August 28, 2007, the Kuwaiti company MTC announced that it was planning to move its headquarters from Kuwait to another country. The countries being considered by MTC were Bahrain, Amsterdam or Dubai. MTC is a Kuwaiti company established in 1983 and now has network in more than 21 countries. It is the second largest Arab telecommunication country and the Kuwaiti’s largest public traded company. It employs more than 1,000 Kuwaitis and has a market value of $30 billion.

MTC deputy chairman Saad A Barrak allegedly stated the reason for leaving non investor-friendly laws of Kuwait and that Kuwait only accounted for 15 per cent of MTC’s revenue, a figure that would fall to 7pc in two years.

On August 29, 2007, Kuwait Times published a very heart felt personal appeal to the CEO, Dr Al-Barrack, of MTC Kuwait:

First of all, let me tell you sir how much respect we have for you and the whole team of MTC. You are a role model for all of us, from businessmen to high school students. Your success in turning MTC from a local telecommunication company to a competitive regional and global telecommunication corporation is a source of inspiration and pride for all Kuwaitis. We cheered with every new license, acquisition, and takeover. We were touched by the social responsibilities and attitudes of MTC wherever it operates
. We wait for your interviews on CNBC Arabia, and are always fascinated by your views on the political economy of this country and are enlightened by your outlook for this region.

Second, No one can blame you one bit for your desire to move the headquarters of MTC out of Kuwait. Such a move, we understand, is not only needed but in fact even provoked to a point. The situation here is unbearable, hence why would a world-class corporation reside in a closed country with a failing democracy, politicized economy, and innovation-hostile environment. The government is weak and unwilling to improve the economic reality; the herd of MPs is known to utilize every bit of creativity and effort
to ruin this country.

As you said, “The world is much bigger than Kuwait,” not only that sir, the world is more friendly, attractive, and encouraging than Kuwait. For socially-responsible MNCs like MTC the world is welcoming, governments are encouraging, liberal economic laws are articulated, talents are waiting, and opportunities are up for grabs. Throughout this big attractive world are the real financial and commercial centers, the real hubs of global economic networks and the true excitement of globalization.

Despite all that, I say - stay, do not move out. If you move out we lose, not only because MTC is the biggest company in Kuwait, not because you employ more than 1,000 Kuwaitis, or because your market value is $30 billion, but most importantly because we will lose this sense of being part of the world. If you move, you would help de-link this society from the global economy, you would cut us off from the global trends and patterns of ideas, innovations, corporate governance, and international standards.

MTC headquarters in Kuwait is a station for the train of globalization - a high-speed train that only stops for those who are willing and able to compete responsibly with others around the world. Once in, MTC carries with it the name of this country all over the world from KSA to Iraq, from Lebanon to Sudan, from Amsterdam to Burkina Faso. As I said earlier, the presence of the MTC headquarters in Kuwait helps to give us a sense of belonging to the world, the world of free movement of ideas, finance, and talents, not that of geopolitics and states which we have been experiencing for decades. Ours is a country squeezed between regional wars, oil, hostile domestic politics, and religious extremism with the herd in the parliament. MTC gives this society an open window to the world of cooperation and sustained prosperity. If you leave we will be left with the herd in the parliament - Mahmoud Najad, Ministry of Communications, and religious fanatics.
If you leave…they win!

Unfortunately, the appeal seem to have gone unheard, and the MTC has announced that it would be moving its headquarters to Bahrain because Bahrain has investor friendly legal structure and is the financial center of GCC.

The Kuwaiti government, along with the people of Kuwait, is disturbed by this by MTC and the communication minister has met with the MTC to solve the issue and remove the problems that mtc may be facing. however, the issue here is not just of MTC facing investment problem, but of every investor in Kuwait.

The Kuwaiti government need to change the investment climate and attract investment, and beat the competition from other GCC countries. Middle East is a booming market at the moment, UAE, Bahrain, Qatar, Saudi Arabia all seem to be getting a share and Kuwaiti government needs to step its game - and right now, Kuwait is not even in the competition, it is losing out.

On Another Note

This weekend was the first Friday/Saturday weekend in Kuwait…

It was great to have a two day weekend, and one that is shared (somewhat) by rest of the world.