Remarkable Acceleration In Turkey-Kuwait Relations In The Last 10 Years
Abdulwahab Al-Roshood, Acting Group CEO at KFH, wrote about the pandemic period in Kuwait, one of the important centres of participation finance, about the Islamic finance in the world, Kuwait's role in the sector, and the Turkey-Kuwait relations which have seen remarkable progress in the last 10 years, for Katılım Finans journal.
KUWAIT'S ECONOMY AFTER THE PANDEMIC
During 2020, the Kuwaiti economy was struggling with economic and social pressures such as the decline in oil price, undiversified economy, weak operating environment, fiscal deficit and demographic
imbalance. The spread of the novel coronavirus (COVID-19) has added stress on Kuwait's financial position and economic activity, limiting its ability to address the inherited socioeconomic issues. However, the pandemic has also prompted vast policy responses and relief measures by the local regulators and the finance sector to swiftly absorb the Covid-19 impacts. For instance, the banks were largely able to accommodate the unprecedented situation thanks to the higher level of capital and liquidity they accumulated compared to recent crisis episodes and the precautionary provisions they allocated based on the regulatory requirements.
THE ROLE OF ISLAMIC FINANCE AND KUWAIT WORLDWIDE
Islamic Finance has grown rapidly although it still constitutes a small share of the global financial market. Over the past few years, the industry has witnessed steady growth in assets which are now estimated at about $3 trillion in value. These assets are forecast to reach $3.69 trillion by 2024. Kuwait’s Islamic financial services sector is well established, with a long history in both Islamic banking and
takaful, or Islamic insurance. In 1977, Kuwait Finance House (KFH) was established as the country’s first sharia- compliant financial institution and remains a leading Islamic financial entity in Kuwait and the world. Acquiring a reputation as an emerging centre for shariah-compliant financial products, Kuwait has been a pioneer in the development of the Islamic financial services (IFS) sector in the GCC region and a key driving force behind the organization of a series of regional meetings, and a number of key early meetings, around the development of IFS products and services. The Central Bank of Kuwait, the regulator and supervisor of the Islamic finance industry in Kuwait, has enacted a series of laws and regulations aimed at further developing Islamic finance, more recently, the formation of higher Advisory supervision authority. It aims to maintain financial stability and to underpin the governance of principles supervision and compliance in Islamic finance and banking institutions according to best international practices as well as the latest digital development. This is in line with rapid developments seen in the Islamic finance industry in the State of Kuwait.
TURKEY-KUWAIT ECONOMIC RELATIONS
The economic relations between Kuwait and Turkey witnessed remarkable progress in the past decade by signing a variety of agreements covering trade, defence, and economic co-operation. Seeking to improve bilateral business and trade relations between Turkey and Kuwait, DEİK's Turkey-Kuwait Business Council was established in 2006 comprising 25 businesspeople operating in various sectors such as construction, defence, finance, and real estate. The Business Council operates under DEİK, Turkey's Foreign Economic Relations Board, in close coordination with the Turkish Ministry of Trade.
Under Kuwait's development plan “New Kuwait Vision” to transform the country into a financial and trade hub by 2035, Turkish companies are involved in major multi-million-dollar construction projects, including the terminal expansion project at Kuwait International Airport. As part of its strategy to support the development efforts, KFH has participated in and arranged several major transactions to finance infrastructure projects. In this regard, the bank funds several development projects in different sectors in Kuwait and outside. KFH has offered financing of Euro 200 million Credit facilities for Limak İnşaat for the construction of a bridge in Turkey, and an Islamic portion of $831 million syndicated facility for Kuwait Airport. KFH offers a wide range of trade and financing solutions to investors in Kuwait and abroad. Our KT Bank AG in Germany, which is the first participation bank in the Eurozone, plays a key role in facilitating businesses by connecting Kuwait to Turkey to Europe, not to mention
relying on the advanced IT infrastructure of the bank and the successful digital transformation strategy that resulted in rolling out unique innovative digital banking solutions.
Acting Group CEO at KFH Abdulwahab Al-Roshood