How business, doctors and journalists prey on your food anxieties I

Kuzvait SPECIAL ADVERTISING SUPPLEMENT P .S
I
As the Emir, Sheikh Jaber AI-Ahmad
AI-Sabah, fresh from a successful
visit to Europe, draws up plans for
Kuwait's development, there are
several points in his favor, KLwait is
the most stable of the six Gulf
Cooperation Council IGCCi countries ;
it is also the most democratic, with
the press enjoying a reasonable
degree of =reedom .
The National Assembly, disb<strong>and</strong>ed
in 1986, is once again in operation,
functioning well, <strong>and</strong> most
commentators are of the opiaion that
the sharing of power with an elected
pariamentwill continue .
There `.s a strong desire to move
forward . Here, Kuwait's Chamber of
Commerce-<strong>and</strong> Industry plays an
active role . Director Gene .-al Ahmad
AI-Haroun, who has nad i ' position
since the Chamber's inception, points
to the need for drastic economic
reform . He stresses :he necessity for
some movement away from the
welfare state <strong>and</strong> the importance of
balancing the country's budget,
together cvith. increased privatization
over the next few years .
Increased privatization is leading to greeter8c9vit
on the stock exchange <strong>and</strong> in the banking sector .
An example of this Is the Moqle
Telecommunications Company (MTC),
wnich is 51% privately owned <strong>and</strong>
has been a major success story in the
latest tecnnological advances . The
company virtually had to rebuild from
scratch after the Guff War, but now
has 110,000 mobile telephone
subscribers <strong>and</strong> 150,000 pagers, prorata
the highest ratio of sets to
poculatior anywhere in the wond .
<strong>How</strong>ever, Kuwait's commitment
to growth will not come easily . As one
of the longer-serving expatriate
bankers explains, "a major public
relations exercise nas to be
Euromoney Awards for Excellence,l994
"THE BEST
BANK IN
THE MIDDLE EAST
FOR 1994"
National Bank of Kuwait ~
undertaken by the government . State
benevolence in its extreme formm is a
thing of the past . Kuwaitis have to
realize that they will have to work
harder <strong>and</strong> pay more Por their
services, particular:y water <strong>and</strong>
electricitv."
As the move towards privatization
gathers momentum, employment is
likely to become an increasingly
important factor . The 1962
Constitution guaranteed employment
for all Kuwaitis, <strong>and</strong> some 97% have
positions in the pub'ic sector . This has
to change, <strong>and</strong> st<strong>and</strong>ards of education
nave declined following the exodus
of Palestinian teachers after the
Gulf War . With!n a young population,
graduates without serious career
cpportunities may prove an
added challenge .
BANKING AND FINANCE
The effect of the co!lapse of the Spuk
AI-Manakh, Kuwait's unregulated
stock market, in 1982, <strong>and</strong> the
commercial losses stemming from
the Iraqi invasion, which left 10,000
companies <strong>and</strong> individuals owing up
to $20 billion, are still being Pelt .
Twenty-year government bonds
issued in 1992 to the banks in
return for these bad debts currently
comprise some 36% of total bank
assets, dcwn from 60% when they
were first issued . They yield a little
under 5%, but are a secure form
of income .
By Law 41 of 1993, the
government set out a schedule for the
repayment of debts . They
could either be repaid in `ull by
September 7, 1995, with an erticing
discount of 46%, or alternatively
settled in full over a period of 12
years . Sources in Kuwait are now
saying :ha : this may be extended to
20 years .
With !oans only making up a
quarter of banks' total assets, <strong>and</strong>
good lending oppoGtrnities limited,
Shelkh Saiem Abdul Azlz A4-Sabah,
the Governor of the Central
Bank of Kuwait, is eager for some
consolldatlon in the banking system .
( LC
Mergers are likely . Already two
specialist banks - the Industrial
Bank of Kuwait <strong>and</strong> the Kuwait
Real Estate Bank - are expected
to come together, <strong>and</strong> talks are
proceeding between the Bark
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