The regulation of foreign investment in Kuwait: the role of law, politics and economic policy in the development process

The relationship between law, foreign direct investment (FDI) and development is a neglected area of investigation, and this study seeks to contribute to the understanding of that relationship through an analysis of the legal regulation of FDI in Kuwait. As well as offering a general theoretical appraisal of the role of FDI in development, it puts forward some practical proposals for legislative innovation and administrative reform in Kuwait with the intention of showing how greater encouragement can be given to the expansion of FDI with a view to promoting the country's future economic and social well-being. The approach in this thesis stresses the importance of considering the effectiveness of Kuwait's FDI regulations against the background of the country's historical evolution and in relation to the distinctive patterns of political economy which have emerged in Kuwait's twentieth-century transformation from a traditional to a more modern society with an impressive level of welfare provision. In this respect, considerable attention is given to the significance of the various oil concession agreements between Kuwait and foreign investors for the exploration and marketing of oil. It is these agreements which have led directly to the growth and development of the country's current FDI regulations, and which have gradually enabled Kuwait to determine its own foreign investment policies as British influence has declined and national independence has been gained. Criticisms are offered, however, of the failure of Kuwait to pay sufficient attention to the role of FDI in the non-oil sectors of the economy. The close examination of the law and administrative practice of FDI in Kuwait reveals a range of failings and inadequacies which have tended to have a negative effect on the attraction of FDI. This particular area of policy in Kuwait has developed in a somewhat piecemeal fashion without sufficient coherence and co-ordination.