Kuwait - Economic development
Since the mid-1970s, Kuwait has restrained its spending on economic development and has fostered a policy of controlled growth. From 1977 to 1982, allocations for development projects remained steady at $1.7–2.5 billion annually, of which 76% was spent on public works, electric power plants, and desalination and irrigation projects. Development plans for the 1980s, stressing industrial diversification, included the expansion of local oil refineries and major projects in petrochemicals, electricity, water supply, highway construction, and telecommunications. Overseas, refining and marketing operations were stepped up.
Post-war economic planning was hampered by the expulsion of the mainly Palestinian middle-ranking civil servants in various government departments. The Industrial Bank of Kuwait played a major role in the industrial redevelopment of the emirate following the war. Diversification and privatization continue to be the strategic goals of the government to increase employment and counter the abrupt swings in the economy due to the heavy dependence on the oil sector. Increased foreign investment has come to be seen as essential to these goals. In May 2000, the government passed the Indirect Foreign Investment Law, allowing foreign investors to buy up to 100% of companies listed on the Kuwait Stock Exchange (KSE) except for banks. The government, however, controls what companies are publicly traded. In March 2001, the Foreign Direct Investment Law was passed, allowing up to 100% ownership of a company operating in Kuwait, although with the disincentive that the profits of the foreign company would be subject to a 55% tax. In July 2001, the government announced a five-year privatization program.