III. ECONOMIC TRENDS AND OUTLOOK A. Major Trends and Outlook Oil Sector: The Kuwaiti economy is driven by oil production and related industries. Due to a rapid rehabilitation of the country's oil fields and refineries, the oil sector has essentially recovered to pre-war levels. Kuwait's crude oil production is currently running at 2.0 million barrels per day and production capacity is estimated to be 2.5 million barrels per day. The country's refining capacity, likewise, has been restored to 800,000 b/d. The future pace of reconstruction will be more modest. Indeed, in the oil sector, crude production may remain constant for some time in conformance with OPEC quotas. Also, while future plans call for additional refining capacity in-country and abroad, it will be several years before further expansion is realized. Non-oil Sector: Kuwait's non-oil economy has been flat since a reconstruction boom which followed the country's liberation. The poor economic performance can be traced in part to the country's changed demographics following the Gulf War. Even now, Kuwait's population is less than 80 percent of the pre-war population. Furthermore, many of the Palestinians who lived in Kuwait with their families prior to the war have been replaced by bachelor expatriate workers who tend to remit their earnings home rather than spend them in Kuwait. These two factors have had a negative effect on the consumer-oriented businesses that make up much of Kuwait's non-oil economy. Despite the recent sluggishness of the non-oil economy, we believe that business is poised for improvement over the short and medium term for several reasons. The country is implementing plans to alleviate the problem caused by the demographic mix by allowing more expatriate workers to bring their families to Kuwait. More importantly, in 1993, the government adopted a "difficult debts law" which will provide sufficient debt relief and a mechanism by which large Kuwaiti investors can recover from losses incurred during the Iraqi Invasion and from some losses dating to the Souk Al-Manakh crisis (an informal stock market which collapsed in the early 1980's). Some elements of the law are controversial and there is pressure from some groups to amend its provisions. Furthermore, it still remains to be seen how many of the bad debts will actually be cleared up by this legislation. Nevertheless, we anticipate that the law will stimulate investment simply by removing uncertainty over the legal status of the debts. This, in turn, should promote the repatriation of capital held outside Kuwait. B. Principal Growth Sectors Non-Oil Sector: We anticipate a general recovery of the non-oil sector of the economy as a result of the debt relief law and other measures. More importantly, however, we see good opportunities for long-term growth in telecommunications, housing, power generation, and health care as a result of government plans to privatize these sectors, as follows: - Telecommunications: Investors are still awaiting a long-promised privatization of Kuwait's government-owned telecommunications sector. The change, which will bring in Western companies as partners, should result in a revamp of the country's telecommunications systems. - Housing: Kuwait provides a generous housing subsidy for Kuwaiti citizens. Although the subsidy tends to distort demand in the housing sector, it will likely be continued, creating, along with Kuwait's high population growth rate, a continuing high demand for residential housing. - Power Generation: Efforts by Western companies to participate in the country's power generation sector have not, so far, met with success. It remains, however, a possible growth area given the rising demand for power and budget constraints facing the Kuwaiti government. - Health Care: Kuwait is moving to privatize its health care services, including encouraging the establishment of private hospitals and studying the possibility of private management of government-owned hospitals. In addition to the opportunities for management and construction of the facilities, with increasing pressure on free health care services, there may arise opportunities for health insurance and/or health maintenance organizations, particularly for expatriates in Kuwait. Oil Sector: Kuwait's government-owned oil sector is expected to continue to grow with a worldwide demand for Kuwaiti crude and refined pro-ducts. One of the more exciting areas for growth, however, is the emergence of a petrochemicals industry in Kuwait. This will be brought about by the construction of a major (650,000 mt/yr) ethylene plant in the Shuaiba Industrial Area. The plant, a USD 2.0 billion joint venture between Union Carbide Corporation and the government-owned Petrochemicals Industries Company, will also produce polyethylene. The availability of these intermediate petrochemical products is expected to open opportunities for a range of chemical and plastics manufacturing industries. C. Government Role in the Economy Kuwait's government plays a dominant role in the local economy. However, that role seems destined to decline as the country moves toward privatization and rationalization of the economy. Kuwait's economic system, modelled on a socialist welfare state, provides for a large measure of government regulation. These regulations restrict participation and competition in a number of sectors of the economy and strictly control the roles of foreign capital and expatriate labor. The Kuwaiti government also owns, outright, interests in many of the private companies in the country including most of the nation's banks. In some cases, the government bought these shares to ameliorate the Souk Al-Manakh stock market collapse in 1982. In other cases, the government ownership was used to provide capital for local industries. The era of government ownership seems to be coming to an end, however. As a part of ongoing privatization efforts, the Kuwaiti government intends to relinquish its interests in these companies, generally by offering its shares on the Kuwaiti Stock Exchange. Finally, the Kuwaiti government is, by far, the largest employer of Kuwaiti citizens. Through efforts to "Kuwaitize" its work force, the government of Kuwait, in effect, has guaranteed employment for all Kuwaiti nationals. While this has had a social benefit, at least superficially, it has resulted in many government ministries being overstaffed and underproductive. It has also made it difficult for private companies to recruit Kuwaitis for meaningful, but rigorous, jobs. D. Balance of Payments Situation Kuwait's balance of payments situation is healthy, with exports exceeding imports by a comfortable margin. Since crude oil and refined products comprise more than 90 percent of the value of exports, however, the country's balance of payments is highly susceptible to changes in oil prices. E. Trade and Investment Barriers: Identification and Brief Description Incompatible Standards: Kuwait, like other GCC member states, maintains restrictive standards which impede the marketing of U.S. exports. For example, shelf life requirements throughout the GCC for processed foods are in many cases far shorter than necessary to preserve freshness. Shelf life requirements are in fact so short that they cause otherwise edible, fresh U.S. products to be deemed by local merchants to be uncompetitive with products that can be left on the shelves longer because they have been shipped from suppliers in countries closer to Kuwait than the U.S. Standards for many electrical products are based on those of the U.K., even though in many cases U.S. products could perform better at lower cost if standards were more flexible. Standards for medical, telecommunications and computer equipment tend to lag technological developments, with the result that Kuwait government tenders often specify the purchase of obsolete, more costly items. Government Procurement & Offset Policies: Kuwait government procurement policies specify local products when available and prescribe a 10 percent price advantage for local firms in government tenders. The Kuwait government views its offset program as a major vehicle for motivating foreign investment in Kuwait. The U.S. government generally opposes the attachment of any type of performance requirement to government tenders, and has recommended that the Government of Kuwait carefully weigh all the potential costs to itself of an offset program. At the same time we have encouraged U.S. firms to familiarize themselves with the terms of this program so as to ensure the offset program does not become an undue obstacle to their business. Under the program, all government contracts in excess of KD 1.0 million (USD 3.5 million) are now to include clauses imposing offset obligations. Moreover, the cumulative supply of more than KD 1 million (USD 3.5 million) in goods and services under a series of contracts during a period of one year by any one company will also result in offset obligations, which will be levied against the full, cumulative value of those contracts. Offset obligations will continue to be set at 30 percent of the value of the contract. The dollar value, however, of this obligation can be reduced if the obligation is settled in a manner which accords with the Government of Kuwait's priorities. The mechanism for reduction of offset obligations is a system of multipliers which gives suppliers additional offset credits depending on how and in what economic areas their investments are made. For instance, so-called "micro" multipliers give suppliers additional credit for a variety of financial measures including original equity, debt, retained earnings of ventures, sales, R & D investments, education and training costs, and pre-establishment costs including feasibility studies, business plans, market research, etc. In addition, the value of these credits can be further increased by "macro" multipliers, depending on the economic sector in which the investment is made. These sectors include education, management and training; manufacturing; assembly for processing; and services. Lack of Intellectual Property Rights Protection: Intellectual property rights protection is extremely lax in Kuwait. While Kuwait has had patent and trademark laws since 1962, the penalties under both are so low as to be effectively irrelevant in deterring illegal activities. Counterfeit products such as clothing, auto parts and household products are widely available. Moreover, the patent law contains provisions for compulsory licensing (e.g., in cases where the patent has not been used in Kuwait) and government "taking" (e.g., in cases of "great importance to national industry") that go far beyond the standard in other countries. Protection afforded by trademark registration is coterminous with the term of one's agency agreement and must be re-applied for after one changes one's agent. Kuwait has no copyright law. As a result, there is a large overt market for pirated software, cassettes, videotapes and unauthorized Arabic translations of foreign language books. The Kuwait government plans to strengthen copyright protection and to implement stricter guidelines and more severe penalties for violations of patents and trademarks. However, these changes will take several years. Kuwait has not signed any international intellectual property conventions, such as the Berne Convention for the Protection of Copyrights, the Paris Convention for the Protection of Industrial Property, or the Geneva Phonograms Convention. Potentially High Tariffs: Kuwait generally maintains a low level of tariff protection. On July 1, 1992, the Government began collecting a 4 percent general tariff on most imports. The GOK can, however, impose protectionist tariffs to shelter "infant industries" from world competition at any time. Before the Gulf War the Kuwaiti government imposed tariffs of up to 30 percent to protect local industries. Arab League Boycott: In June 1993, Kuwait announced that it would no longer apply the secondary boycott to firms that do business with Israel and the tertiary boycott to firms that do business with firms subject to the secondary boycott, but would continue to apply the primary boycott to goods and services produced in Israel itself. Kuwait has also taken steps to revise its commercial documentation to eliminate all direct references to the boycott of Israel. U.S. firms may still occasionally receive requests for boycott-related information from private Kuwaiti firms or uninformed Kuwaiti public officials. In such cases, U.S. firms should advise the Embassy of the request, report the request to the U.S. Department of Commerce and take care to comply with all requirements of the U.S. antiboycott laws. Advice on boycott and antiboycott related matters is available from the U.S. Embassy in Kuwait City or from the Office of Antiboycott Compliance in Washington at (202) 482-2381. Joint Venture and Foreign Investment Restrictions: Foreign ownership in joint ventures with Kuwaiti firms is now limited to 49 percent. Foreign firms may not invest in the oil or financial services sectors. Foreign investment in real estate is limited to nationals of the other GCC-member states. Foreigners (again with the exception of GCC nationals) are not permitted to invest in stocks directly through the Kuwait stock exchange. Other sectors such as telecommunications, health care and airlines are still government-run, but may become more accessible to foreign investment as they are scheduled for near-term privatization. High Business Taxation: Corporate taxation in Kuwait is applied only to foreign firms and has become a major problem for U.S. firms seeking to establish a permanent business presence in Kuwait. Rates are high, ranging up to 55 percent of gross profits. Exclusions for business expenses are arbitrarily limited to very low levels, e.g., three percent of gross revenues for all head office expenses in some cases (mainly for turnkey supply and installation-type contracts). Offshore as well as onshore income is taxed. Finally, administration of the entire tax code is capricious, leaving foreign firms without a basis on which to estimate their ultimate tax liability. F. Labor Force Kuwait has a diverse labor force. Kuwaiti nationals occupy most of the top management positions in the private and government sectors of the economy. Moreover, unemployment among Kuwaitis is virtually nonexistent as a result of government policies to promote the hiring of Kuwaitis in both sectors. Kuwaitis are outnumbered in the work force, however, by expatriate laborers of diverse backgrounds. While there are a number of American and Western European workers in Kuwait, particularly in the higher-skilled positions, the vast majority of expatriate workers are lower paid laborers from other Middle Eastern countries and South Asia. Prior to the Gulf War, Palestinians occupied many of the country's middle-management positions. Following the war, however, most of those positions have been filled by workers of other nationalities. G. Major Local & Third Country Competitors in Specific Sectors Air Conditioning Sector: - Awalco (Bahrain) - Daiken (Japan) - Hitachi (Japan) - Kuwait Refrigeration Industries Company (Kuwait) - Mitsubishi (Japan) - National [Panasonic] (Japan) - The National Factory (Saudi Arabia) - Sanyo (Japan) - Al-Zamil Refrigeration Industries (Saudi Arabia) Apparel Sector: - Chanel (France) - Dior (France) - Gian Franco Ferre (Italy) - Gibierre Donna (Italy) - Kenzo (France) - LaCroix (France) - Lanvin (France) - Ted Lapidus (France) - Matisse (Italy) - Miss Diana (Italy) - New York (Italy) - Saint Laurent (France) - Scada (Japan) - Trussardi (Italy) - Ungaro (France) - Valentino (Italy) - Versace (Italy) - Yamamoto (Japan) Automotive Sector - Alfa Romeo (Italy) - automobiles - Audi (Germany) - automobiles - BMW (Germany) - automobiles - Citroen (France) - automobiles - Daihatsu (Japan) - automobiles - Fiat (Italy) - automobiles - Honda (Japan) - automobiles - Hyundai (Korea) - automobiles - Jaguar (U.K.) - automobiles - Komatsu (Japan) - trucks - Lada (Russia) - automobiles - Mercedes (Germany) - automobiles - Mitsubishi (Japan) - automobiles - Nissan (Japan) - automobiles - Peugeot (France) - automobiles - Porsche (Germany) - automobiles - Range Rover (U.K.) - automobiles - Renault (France) - automobiles - Rolls Royce (U.K.) - automobiles - Saab (Sweden) - automobiles - Tata (India) - trucks - Toyota (Japan) - automobiles - Volvo (Sweden) - buses - Western Star (Canada) - trucks Aviation Sector: - Airbus Industrie (European consortium) - civilian aircraft Computer Sector: - Epson (Japan) - Ericsson (Sweden) - Hitachi (Japan) - ICL (U.K.) - NEC (Japan) - Panasonic (Japan) - RM (U.K.) - Toshiba (Japan) Construction & Public Works Sector: - AEG (Germany) - reservoir controls - Alcatel Cable Controls - reservoir controls - Ansaldo Energia (Italy) - recarbonation units - Ansaldo Industria (Italy) - water recarbonation units - Asea Brown Boveri (Switzerland-Sweden) - reservoir controls - Belleli Saudi Heavy Industries (Italy/Saudi Arabia) - desalination plants - Bristol Babcock (U.K.) - reservoir controls - Carter Building Systems (U.K.) - specialty subcontractor - Cogelex (France) - reservoir controls - ECT Consultancy Rotterdam (Netherlands) - free trade zone construction consulting - Hyundai Engineering & Construction Co. (Korea) - road building - Iritecna (Italy) - distillation units - Kennedy & Donkin (U.K.) - consulting - M.F. Kent (U.K.) - specialty subcontractor - Logica International (U.K.) - reservoir controls - Mitsubishi Heavy Industries (Japan) - distillation units - Mitsui & Company (Japan) - distillation units - Morrison (U.K.) - general contractor - PWT Projects (U.K.) - recarbonation units - Reggiane (Italy) - recarbonation units - Rotary International (U.K.) - specialty subcontractor - Sasakura Engineering (Japan) - distillation units - Sidem (France) - distillation units - Siemens (Germany) - reservoir controls - Spie Batignolles (France) - distillation units - Taylor-Woodrow (U.K.) - general contractor - H.V. Turbo (Denmark) - sewage treatment plant blowers - Weir Westgarth (U.K.) - distillation units Defense Sector: Air Weapons Systems - Aerospatiale (France) - helicopters - CMC (Canada) - air defense system communications - Ericsson (Sweden) - air defense system communications - Eurocopter (France) - helicopters - Matra (France) - missiles - Thomson CSF (France) - avionics - (Name n/a) (Italy) - helicopters Land Weapons Systems & Vehicles - (Name n/a) (Australia) - aircraft maintenance - British Aerospace (U.K.) - vehicle maintenance - (Name n/a) (Canada) - aircraft maintenance - Faun (Germany) - trucks - GIAT Industries (France) - artillery refurbishment - GKN (U.K.) - infantry fighting vehicles - Huntington (U.K.) - multiple rocket launch systems - Matra (France) - missiles - Mercedes (Germany) - trucks - MIC (European consortium) - multiple rocket launch systems - MOAG (U.K.) - light armored vehicle - (Name n/a) (Russia) - multiple rocket launch systems, artillery - Shorts Brothers (U.K.: Northern Ireland) - missiles - Steyr (Austria) - trucks - (Name n/a) (South Africa) - artillery - Technika (Hungary) - ordnance removal/refurbishment - Vickers (U.K.) - tanks - VSEC (U.K.) - artillery - Volvo (Sweden) - trucks - Western Star (Canada) - trucks Sea Weapons Systems - Blohm & Voss (Germany) - ships - Chantiers Maritimes de Normandie (CMN) (France) - ships - DCI (France) - ships - Fincantieri (Italy) - ships - Lurssen Werft (Germany) - ships - Matra (France) - missiles - Otomelara (Italy) - artillery - Royal Schelde (Netherlands) - ships - Vosper Thorneycroft (U.K.) - ships - Yarrow Shipbuilding Ltd. (U.K.) - ships Command and Control Systems - Thomson CSF (France) - radars, command & control systems - Norconsult (Norway) - command & control systems Dental Equipment Sector: - Amalgamated (U.K.) - Amdent (Sweden) - Anthous (Italy) - Bego (Germany) - Bien-Air (France) - Castellini (Italy) - Degussa (Germany) - Durr (Germany) - Faro (Italy) - Findent (Finland) - Kavo (Germany) - Siemens (Germany) - Trophy (France) Drugs & Pharmaceutical Sector: - Allen and Hanbury's Ltd. (U.K.) - A. Nattermann and Cie (Germany) - Arab Ostuka Pharmaceutical Co. (Egypt) - Armour Pharmaceutical Co. (U.K.) - Asta-Werke AG (Germany) - Astra Lakemedel (Sweden) - Ayerst Laboratories (Canada) - Bayer AG (Germany) - B. Bruan Melsungen AG (Germany) - Beecham Research Laboratories (U.K.) - Benacrd (U.K.) - Bieffe (Italy) - Boehringer Ingelheim (Germany) - Boehriger Mann (Germany) - The Boots Co. (U.K.) - Charles E. Frosst and Co. (Lebanon) - Chemiewerk Homburg (Germany) - Ciba-Geigy AG (Switzerland) - Cilag-Chemie (Switzerland) - Clin-Midy International (France) - Continental Pharma (Belgium) - Cooper (Switzerland) - Dagra N.V. (Netherlands) - Delandale Laboratories Ltd. (U.K.) - Dispersa Ltd. (Switzerland) - Dumex (Denmark) - Duncan, Flokhart and Co. (U.K.) - Duphar (Netherlands) - Elmu Laboratories (Spain) - Esai Co. Ltd (Japan) - Evans Medical Ltd. (U.K.) - Farmitalia Carlo Erba (Italy) - Ferring AB (Sweden) - Ferrsan (Denmark) - F. Hoffman La Roche & Co. (Switzerland) - Fisons Limited (U.K.) - Gerhard Buchmann (Germany) - Dr. Gerhard Mann (Germany) - Gist Brocades (Netherlands) - Glaxo Group Ltd. (U.K.) - Grunenthal (Germany) - Gruppo Lepetit (Italy) - Hausmann Laboratories Inc. (Switzerland) - Heinrich Mack Nachf (Germany) - Henning Arzneimittel (Germany) - H. Lundbeck & Co. (Denmark) - Hoechst (Germany) - Imperial Chemicals Industries Ltd. (U.K.) - Istituto Farmacologico Serono (Italy) - Janseen Pharmaceutica (Belgium) - Juphar (United Arab Emirates) - Kabi AB (Sweden) - Kahira Pharmaceutical and Chemical Co. (Egypt) - Kali-Chemie Pharma (Germany) - Knoll (Germany) - Laboratories Aron (France) - Laboratories Chibret (France) - Laboratories Cusi SA (Spain) - Laboratories Egic-Joullie (France) - Laboratories Emile Charpentier (France) - Laboratories Goupil (France) - Laboratories Laroche (France) - Laboratories RoC (U.K.) - Lakeside Labaz (France) - Latema (France) - Leo Pharmaceutical Products (Denmark) - Linger and Fischer (Germany) - Lipha Pharmaceutical Ltd. (U.K.) - Lloyed-Hamol Ltd. (U.K.) - Luitpold-Werk (Germany) - Macarthays Laboratories Ltd. (U.K.) - May and Baker Ltd. (U.K.) - Medinova Ltd. (Switzerland) - The Memphis Chemical Co. (Egypt) - Mepha Ltd. (Switzerland) - Merrell Toraude (France) - Merz & Co. (Germany) - Nicholas Laboratories Ltd. (U.K.) - Nordisk Gentofte (Denmark) - Norgine Ltd. (U.K.) - Novo Industry (Denmark) - Organon International (Netherlands) - Ormonoterapia Richter Division of Gruppo (Italy) - Pharamton SA (Switzerland) - Pharmaceutical Division (U.K.) - Pharmax Ltd. (U.K.) - Phramcia AB (Sweden) - Pierrel (Italy) - Radiol Chemical Ltd. (U.K.) - Reckitt and Colman (U.K.) - Regent Laboratories (U.K.) - Riker Laboratories (U.K.) - Roger Bellon (France) - Rowa-Wagner (Germany) - Roussel Laboratories Ltd. (France) - Sandoz Ltd. (Switzerland) - Schering AG (Germany) - Searle Pharmaceuticals (U.K.) - Servier Laboratories Ltd. (U.K.) - Silbe Ltd. (U.K.) - Smith and Nephew Pharmaceutical Ltd. (U.K.) - Solco Basle Ltd. (Switzerland) - Specia (France) - Spret-Mauchant (France) - E.R Squibb and Sons Ltd. (U.K.) - Stafford-Miller Ltd. (U.K.) - Swiss Serum & Vaccine Institute Berna (Switzerland) - Thames Laboratories Ltd. (U.K.) - UCB SA (Belgium) - Vifor Sa (Switzerland) - Wander Ltd. (Switzerland) - WB Pharmaceuticals Ltd. (U.K.) - Welcome Medical Division, the Welcome Foundation Ltd. (U.K.) - William R. Warmer and Co. (U.K.) Medical Sector: - Advanced Medical Technology (Singapore) - disposable gloves - Aesculap (Germany) - surgical instruments - AGFA (Germany) - X-ray films - Amplaid (Italy) - audiometry - Anssel (Australia) - disposable items - Asahi Medical Co. (Japan) - blood filters - ATC Medical Technics GMBH (Germany) - surgical equipment - Atom (Japan) - general medical equipment - Belmont Corp. (Japan) - operating equipment - Bio-Merieux (France) - analytical equipment - Brown (U.K.) - sutures - Chun Yip Plastics Ltd. (Hong Kong) - disposable items - Collin Corp. (Japan) - blood pressure equipment - Days Medical (U.K.) - wheeled chairs - Denley Instruments (U.K.) - refrigerators - E. Merick (Germany) chemical products - Fison (U.K.) - laboratory equipment - Gambro (Sweden) - disposable items - Gettings (Sweden) - sterilizers - Hanlein (Taiwan) - disposable items - Heraeus (Germany) - operating lamps - Hitachi (Japan) - medical equipment - Ikegami (Japan) - television cameras - Jeol (Japan) - laboratory equipment - Kawasumi (Japan) - dialysis equipment - Lawton (Germany) - surgical equipment - Medela (Switzerland) - suction units - Molnlycke (Sweden) - disposable items - Olympus/Keymed (Japan) - endoscope equipment - Phillips Medical Equipment (The Netherlands) - medical equipment - Picker International (Germany) - X-ray equipment - Plast Medical (Italy) - disposable items - Polystan Benelux (The Netherlands) - disposable items - Respharma (Italy) - furniture - Richard Wolf and Karl Storz (Germany) - endoscopy - Scalvo (Italy) - diagnostic products - Seton (U.K.) - bandages - Shimadzu Scientific (Japan) - medical equipment - Siemens (Germany) - medical equipment, X-ray machines & scanners - Smith and Nephew (U.K.) - surgical equipment - Sticle (Sweden) - operating tables - Topcon (Japan) - ophthalmology equipment - Toshiba (Japan) - medical equipment and X-ray machines - TSC-Fong (Taiwan) - disposable items - Vygon (France) - disposable items Oil Sector: - AMEC International Construction (U.K.) - construction - Babcock Contractors (U.K.) - construction - Belleli (Italy) - construction - British Petroleum (U.K.) - oil services - John Brown Engineers & Constructors (U.K.) - project management - Cegelec (France) - construction - China Petroleum Engineering & Construction Corporation (P.R.C.) -- construction - Chiyoda Corporation (Japan) - construction - Daelim Engineering Company (Korea) - construction - Delta Catalytic (Canada) - construction - Engineers India Ltd. (India) - construction - Fochi (Italy) - construction - Heurtey Petrochem Engineering (France) - project management - Hitachi Zosen Corporation (Japan) - construction - Hyundai Engineering & Construction Co. (Korea) - construction - Jacarossi Imprese (Italy) - construction - JGC Corporation (Japan Gas Company) (Japan) - construction - M.F. Kent (U.K.) - construction - King Wilkinson (Babcock group) (U.K.) - project management - Krebs & Compagnie (France) - construction - Linde (Germany) - petrochemical process technology - Mitsubishi Heavy Industries (Japan) - construction - Mitsui Engineering & Shipbuilding Co. (Japan) - construction - Monenco Agra, Inc. (Canada) - construction - Norwegian State Oil Company (Norway) - oil services - Punj Alloyed Engineering (India) - storage tank repair - Rendel, Palmer & Tritton (U.K.) - offshore structures consulting - Royal Deutsch (Germany) - oil services - Snamprogetti (Italy) - construction - SNC-Lavalin International, Inc. (Canada) - construction - Southern Petrochemical Industries Co. (India) - maintenance - Spie Batignolles (France) - construction - Sunkyong Engineering & Construction Co. (Korea) - construction - Taylor Woodrow (U.K.) - construction - Total (France) - oil services - Toyo Engineering Co. (Japan) - construction - TPL (Technologie Progotti Lavori SPA) (Italy) - construction - George Wimpey (U.K.) - construction Power Sector: - AEG (Germany) - power generation equipment - Ansaldo Energia (Italy) - maintenance - Asea Brown Boveri (Switzerland-Sweden) - power plants - Balfour Beatty Construction International (U.K.) - power plant construction) - Bristol Babcock (U.K.) - power generation equipment - BMB United Engineering Group (Turkey) - power plant construction - Cogefar (Italy) - power plant construction - Cogelex (France) - power plants - Consolidated Contractors International Company (CCC) (Greece) - power plant pipelines - Daelim Industrial Co. (Korea) - power plant construction - Deutsche Babcock (Germany) - power plants - Dumez (France) - power plant construction - Fougerolle (France) - power plant construction - GEC Alsthom (U.K.-France) - power generation equipment - Hitachi (Japan) - power generation equipment - Hyundai Engineering & Construction Co. (Korea) - power plant construction - Merz & McLellan (U.K.) - power project management - Mitsubishi Heavy Industries (Japan) - power plants - Siemens (Germany) - power generation equipment - SOGEA (France) - power plant construction - Sprecher Energia (Italy) - power plant construction - Tekfen (Turkey) - power plant pipelines - Torno (Italy) - power plant construction - Toshiba (Japan) - power generation equipment Safety & Security Sector: - Racal Chubb (U.K.) - Taylor Woodrow (U.K.) - Thorn Security (U.K.) Telecommunications Sector: - Alcatel (France) - cellular telephones - Alenia (Italy) - earth stations - Electrowatt Engineering Services (Switzerland) - telecommunications tower construction management - Ericsson (Sweden) - telephone switches, cellular telephones - Fujitsu (Japan) - telephone switching equipment - GPT (GEC Plessey Telecommunications) (U.K.) - telephone switching equipment - Hitachi (Japan) - telephone switching equipment - GEC Marconi Communications International (U.K.) - earth stations - Mitel (Canada) - telephone equipment - NEC (Japan) - telephone switches, PBX, earth stations - Nokia (Finland) - cellular telephones - Northern Telecom (Canada) - PBX - Philips (Netherlands) - telephone equipment - PKI (Germany) - telephone equipment - Siemens (Germany) - telephone equipment, earth stations - Telecommunications Consultants India Ltd. (India) - telephone network rehabilitation H. Infrastructure Situation Re: Goods/service Distribution Kuwait is a small country and many of the challenges of distribution of goods and services found in other, larger countries are non-existent here. Kuwait has two modern ports, at Shuwaikh and at Shuaiba, which handle the vast majority of the country's imported goods. Both are equipped with facilities to handle most kinds of cargo, but Shuwaikh is the regular post of entry for most consumer goods entering the country by container ship. Shuaiba, located in Kuwait's refining and manufacturing complex, handles some of the country's industrial goods imports and is the export point for petrochemicals, sulfur and petroleum coke. Kuwait's road system is well developed, with modern multilane expressways linking all areas of the country. There are no railways in the country. Kuwait International Airport is located south of the city, is easily accessed by expressway, has a number of regular flights to local destinations, Europe and Asia and can handle the world's largest aircraft. Kuwait has several major electric power generating plants which, through desalination processes, are also the source of the country's potable water supply. The country currently has an adequate generating capacity and the plants can be fired by natural gas or fuel oil. However, a surging population and subsidized prices create a rapidly rising demand for electricity, particularly as air-conditioning load during the summer months. Planned expansion projects should be able to meet this demand for the foreseeable future. I. Major Infrastructure Projects Underway Major non-defense construction projects underway in Kuwait are: - Amiri Diwan and Council of Ministers Buildings ($300 million) - KNPC Storage Tank Repairs ($6 million) - KNPC Mina Al-Ahmadi Refinery Reconstruction ($87 million) - KNPC Acid Gas Removal Plant ($400 million) - KNPC MTBE/Alkylation/Fluid Catalytic Cracker ($400 million) - KOC North & South Tank Farms Reconstruction ($60 million) - KOC Central Manifold Project ($50 million) - KOC Gathering Centers Nos. 27 & 28 ($500 million) - Kuwait Audit Bureau Headquarters ($10 million) - Kuwait University New Campus at Shedadiya ($535 million) - Kuwait University Medical Faculty Expansion ($75 million) - Headquarters of Ministry of Electricity and Water (MEW) and Ministry of Public Works (MPW) ($55 million) - MEW Sabiya 2400 MW Power Plants ($1.6 billion) - MEW 440 MW Shuaiba North Power Plant? ($600 million) - MEW Refurbishment of 4 Substations ($115 million) - MEW 2 Recarbonation Units ($122 million) - MEW Al-Zour South Distillation Project ($212 million) - MOC Telecommunications Tower ($115 million) - MOC 100,000 Line Switching Equipment ($15 million) - MOC 80,000 Line Switching Equipment ($10 million) - MOC Four Satellite Earth Stations ($33 million) - MPH Adan Dental Clinic ($7 million) - MPW Bayan Palace Reconstruction ($48 million) - MPW South Surra Sewerage Consultancy ($8 million) - MTSC 50,000 GSM Cellular Phones, Phase I ($32 million) - Municipality Renovation of Kuwait's Waterfront ($70 million) - NHA Houses & Apartments in Sabiya and Khairan ($15 billion) - PIC-Union Carbide Petrochemicals Complex ($2 billion) - PIC Shuaiba Polypropylene Plant ($150 million) - U.S. Embassy ($26 million) Abbreviations: KNPC - Kuwait National Petroleum Company KOC - Kuwait Oil Company MEW - Ministry of Electricity and Water MOC - Ministry of Communications MPH - Ministry of Public Health MPW - Ministry of Public Works MTSC - Mobile Telephone Systems Company NHA - National Housing Authority PIC - Petrochemical Industries Company