Kuwait improving IT infrastructure: Oxford Business Group

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A complex of buildings in downtown Kuwait City, Kuwait. Photo - Geoff Emerson

An influential research group said Kuwait is improving its information technology (IT) infrastructure and brining it in line with its Gulf neighbours.

The World Economic Forum (WEF) has ranked Kuwait 62nd out of 142 countries in its latest annual Global Information Technology Report. The Gulf nation was rated on its IT networked readiness index, which grades economies on their IT usage, acceptance and efficiency. Kuwait’s GCC counterparts fared better in the rankings, all featuring in the top 40.

Kuwait was the only significant mover in the WEF’s latest survey, climbing 13 places. The WEF singled out the oil-rich nation in its 2011 report for being the only high-income economy that did not feature in the top half of the global rankings.

While highlighting the necessity for Kuwait to further bolster legislation relating to IT and to expand broadband reach, the WEF report attributed the country’s marked improvement to a number of factors, including an improved political and regulatory environment and higher levels of individual and business usage.

The report also stressed on Kuwait, along with other GCC states, to do more to improve IT penetration. While acknowledging that regional governments had adopted ambitious digital strategies, the WEF said local economies would benefit from expanding their overall skills base, as well as further liberalising the IT markets.

Qosi Al Shatti, the deputy director-general of the Central Agency for Information Technology (CAIT), the state agency established in 2006 to develop IT policies and to supervise the implementation of future plans and the nation’s e-government programme, said in a speech during a seminar in May that Kuwait needs to develop the competitiveness of its IT industry if it is to broaden and diversify its economy.

“The competitiveness of countries in the IT sector plays an important role in economic and social development,” he said. “The more IT competitive the countries are, the more they can attract investments, create jobs, diversify sources of income and raise living standards.”

Kuwait’s WEF ranking comes in stark contrast to its spending on IT goods and services as the Gulf state is the third-largest computer market. Investments in this segment are forecast to increase further in the second half of 2012.

According to a report issued in early June, IT service sales are expected to increase by 9% year-on-year in 2012 to reach $291m over the $267m recorded in 2011. The study, prepared by the analysis firm Research and Markets, said the boost in spending would be driven in part by the government pushing for greater adoption of new technology by the country’s industrial sector.

The finding also projected that hardware sales would hit $394m in 2012, a 9% increase, with software sales climbing by a similar rate to $254m, up from the $233m posted last year. Private, state and corporate sales should see a solid increase, the report said, as the Kuwaiti economy regained momentum following the global economic downturn.

According to estimates by the IMF, Kuwait’s economy is set to grow by 6.6% this year. While lower than last year’s 8.3% rise in GDP, that result was fuelled by increased state spending and steep wage hikes, whereas the 2012 projections are based on higher oil sales and real-term growth.

The Oxford Business Group report said that some of this growth should flow into the IT sector, as firms seek to upgrade existing platforms and citizens take advantage of increased earnings to buy new electronics. Kuwait could soon be in a better position to compete with its neighbours, as the sector seeks to improve the regulatory environment and moves to address some of the issues raised by the WEF, the report concluded.

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