Pai Leading Government Moves To Establish Fund To Support Industrial Exports

The Public Authority for Industry (PAI) is leading extensive government moves to establish a fund under its umbrella, to direct its capital to support industrial exports, noting that the efforts made in this regard include a proposal to establish what it called ‘a golden list’ under which all deserving factories will be supported by the target fund.

Al-Rai quoting sources pointed a committee has been formed under the chairmanship of PAI with members from the ministries of Commerce and Industry and Foreign Affairs, as well as from the General Administration of Customs, the Kuwait Chamber of Commerce and Industry, and the Industrialists’ Union the purpose of which is to develop local industrial exports.

The sources did not specify the target capital of the fund but tentative discussions are still ongoing in the midst of legal and technical coordination between the concerned authorities on the possibility of establishing a fund with government capital directed to support part of the financing of basic materials for eligible industrial exporters, provided that part of the raw materials PAI deducts from the exporter’s revenues which it called a fair percentage.

According to the sources, the Fatwa and Legislation Department, in oral discussions, expressed its rejection of this proposal, on the grounds that the procedure violated the law, explaining that the current trend is for the committee to prepare a specific vision in this regard that emphasizes the importance of the fund’s role in supporting the development of industrial exports and its lack of impact on public money, especially since the industry is on the cusp of a new era of vision and partnership in ambition, aspirations and facing challenges, with the aim of supporting and strengthening its path and advancing it towards new and ambitious horizons, suiting the aspirations and challenges of the future stage.

The sources pointed out that the success in making tangible changes in the structure of industrial output and the development of industrial exports will raise the rates of non-oil revenues, from more than one gate, not least the increase in fees collected by the state on customs release, and it is also relied on that the targeted support from the Fund will contribute to building a strong and solid competitive industrial economy.

It is noteworthy that the value of annual manufacturing exports amounted to about 1.67 billion dinars in the year preceding the Corona virus pandemic, including the petrochemical sector, which is a modest number compared to the exports of neighboring countries. The sources stated that the members of the committee discussed the most prominent challenges that reduce the level of Kuwaiti exports from the industrial sector and their development, while they reviewed some possible solutions to overcome these obstacles, which are being listed in preparation for submitting them to the Council of Ministers to take what it deems appropriate.

The sources indicated that the comprehensive study expected to be prepared by the committee will not be limited to limiting the challenges of developing industrial exports, but will also include the most prominent possible solutions through which sustainable development of this sector can be achieved. In this regard, they agreed that there are a number of major challenges impeding the development of Kuwaiti industrial exports, most notably the following:

1 – Exaggeration of customs release fees related to export and transport materials.

2 – The lack of complete readiness of the border crossings, as there is consensus that the border crossings do not keep pace with the development of the targeted industrial exports, and that their continuation in the current situation affects the efforts made in this regard.

3 – A second point related to the ports, related to the lack of border warehouses, as their current status and potential reflect efforts to create a significant activity in the development of industrial exports.

4 – Unilateral decisions taken by some border countries, far from the provisions of established agreements, which may sometimes be issued without prior coordination with Kuwait, which creates a big confusion locally for local industrial exporters.

In addition, representatives of Kuwait from more than one side confirmed during some meetings that took place with some border countries that they do not oppose the idea of ​​development decisions taken by neighboring countries to regulate the movement of imports and exports, given that any development is positively reflected on everyone, but it is not healthy for the border decision to be taken individually without prior coordination with the countries concerned with the decision, at least to arrange their situation.

5- Preventing the entry of Kuwaiti goods to some countries, as this situation leads to a reduction in the number of markets that can receive Kuwaiti industrial goods and what increases the challenge is that this ban is for non-technical or financial reasons.

6 – The lack of available data from the Central Statistical Organization regarding the figures of imports and exports, as representatives of all the parties participating in the committee pointed out that there is a state of disorganization in this sector, to the extent that the lack of clear and updated data hinders efforts to develop industrial exports.

Suggested solutions:

The sources indicated that the representatives of the committee, in their meeting yesterday, identified some quick solutions through which they can mitigate the repercussions of the challenges that impede the development of industrial exports, foremost of which are:

a – Requesting ‘Trade’ and ‘Customs’ officials to provide a clear and updated database of industrial exports and imports, to avoid the repercussions of weak data available in this sector.

b – Launching a platform for registering exporting factories and spreading awareness about the importance of export development and its mechanisms, while motivating factory owners to register with this platform.

c – Cooperating with the local banking system or the industrial bank to provide appropriate financial facilities to industrial exporters, at the best possible interest rates.

 

SOURCE  :   TIMES KUWAIT

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