Kuwait Economic Society calls for the setup of a KD125 million fund to help SMEs weather COVID-19 lockdowns
Kuwait, 20 February 2021: In a policy proposal exclusively published on Kuwaitimpakt.com, the Kuwait Economic Society (KESOC) today called for the immediate establishment of a KD125 million fund to help small and medium enterprises weather COVID-19 related lockdowns.
The document presents the critical state of Kuwait’s SMEs and proposes the establishment of the “Ina’ash SME Fund” to cover rents and waive a range of government duties in an effort to resuscitate the sector, as captured by its name. Ina’ash is Arabic for ‘resuscitate” or “to resuscitate”.
To benefit from the grants, waivers and protections offered by the fund, which has already received the endorsement of Kuwait University’s College of Business Administration Excellence Center, participating businesses must commit to trade with other fund benefactors, share data, and join an online procurement platform.
The proposal calls upon the government to set up a two-year Special Purpose Vehicle (SPV), which disburses grants to companies entering the fund voluntarily. Benefits of joining the fund include:
- Reimbursement of 25% of the annual rental value for companies.
- Waiving PIFSS subscription for one-year, to be covered by the fund for Chapter Five registrants.
- Exemption on all government fees for one-year, including renewal of licenses, customs duties and clearances.
- Waiving registration fees for commercial vehicles/fleets for one year.
- Waiving fees on employee transfer and renewal for one year (Ministry of Social Affairs and Labor).
- Waiving utilities fees for one year.
- Recommendation to settle dues from government and cooperative societies to businesses within 30 days.
- Streamlined SME loans from local banks by establishing a committee to review and facilitate loan options.
Kuwait Economic Society Chairman Mr. Abdul Wahab Muhammad Al-Rasheed, said “Today we published this paper in cooperation with kuwaitimpakt.com, as we believe in the importance of civil society’s contribution to the policy making process. Our goal is to have this policy paper act as a catalyst for decision-makers in Kuwait to provide the much needed relief to Small and Medium Enterprises and not delay it any longer. Kuwait’s economy has been plagued by many challenges over that last year and we aim, through this paper, to present a realistic and viable solution to the SME problem that can be implemented by decision makers.”
The proposal calls for the establishment of a Board of Directors of nine members to manage the INA’ASH SME FUND. In order to ensure good governance, the proposal calls for a balanced representation on the board between government agencies and civil society institutions.In addition to managing the fund, the Board Of Directors would be tasked with coordinating efforts to improve the SME ecosystem in Kuwait, working with the cabinet and legislator on amending Articles 28 and 49 of Private Sector Law (No. 6 of 2010) and insure the issuance of bylaws to law No. 74 of 2019 pertaining to government tenders.
“Kuwait faces major economic challenges whose repercussions have multiplied in light of the global pandemic. Failure to move to save the small and medium enterprises sector will exacerbate the challenges even more.” said Mohammad Bader Al-Jouan, the head of the Public Policy Committee at the Kuwait Economic Society, “Today, we are locked in a race against time to build a sustainable national economy away from oil by diversifying the production base and increasing the private sector’s contribution to the gross domestic product. Supporting and empowering small and medium enterprises is key to achieving this. Decision-makers should think about the cost of their inaction to the state budget. We believe that failure to properly address the situation will incur a heavy cost in the long run.”
On the one year anniversary of the global pandemic, the Kuwait Economic Society puts forth a comprehensive solution to assist an integral sector of the economy that has long suffered from the brunt of government delay and inaction. The policy paper can be accessed today through Kuwaitimpakt.com.
This document was first published on Kuwaitimpakt.com ( @Kuwaitimpakt ), a platform purposely built to house original public policy papers, essays, and data-driven research on matters related to Kuwait’s economy. Our primary goal is to support authors and scholars by attracting a wider readership for their work. Our secondary goal is to build a library of quality home-grown intellectual and academic papers that advance and deepen the discussion on fiscal, economic, and business issues.
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