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Sat 27 Dec 2008 04:00 AM

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Kuwait on the rise

Benjamin Franklin supposedly once said that there never was a good war or a bad peace. He'd obviously never been to Kuwait.

Benjamin Franklin supposedly once said that "In my opinion, there never was a good war or a bad peace."

Well, Ben apparently has never been to Kuwait.

One of the ironies of the disastrous Iraq war is that conflict, if it is not in your country, is not necessarily a bad thing from an economic perspective.

The Oxford Business Group reported recently that the two beneficiaries of the Iraq war are Jordan and Kuwait. Commercial property values for Kuwait in particular have been stimulated by the large flood of new companies establishing operations to target, as Kuwait correspondent Abigail Mathias reports, "the large and affluent Iraqi market."

However, Kuwait is by no means solely relying on a war to lift its economic fortunes.

In many ways Kuwait rivals Dubai in attracting investor attention to a thriving real estate market no matter what the economic outlook for the rest of the world looks like. In fact, the National Bank of Kuwait announced that the value of real estate sales have grown by 67% in 2007, and accounted for growth in the first quarter of this year of US $3 billion.

This doesn't mean that Kuwait hasn't had its fair share of setbacks like the rest of the world. Construction projects overall have slowed down, although the most prestigious and largest undertakings continue at a normal pace. And any slowdown in infrastructure work has largely been the doings of the country's own bureaucracy.

But consider the projects that are moving along at a smooth pace and giving Kuwait a new identity: The Bayan Palace, Amiri Diwan, the Souq Sharq with enough entertainment and retail facilities to stretch over 2.5km of coastline; the Arraya 2 Office Tower and much more.

So while the Iraq war has contributed to providing a foundation of major companies seeking a homebase to do business not only in Iraq but in other GCC countries, Kuwait's massive oil reserves also allow the country to reach deep into its pockets to keep these projects alive.

Further, as Mathias reports, the country has embarked on a $41 billion project to develop its northern oilfields. This will only fuel its robust economy and virtually guarantee rapid commercial and residential growth.

The only dark cloud on the horizon is ensuring that contractors receive enough supplies and materials, given the chronic supply shortages throughout the GCC, to keep the work going and convincing foreign investors who are having a rough time elsewhere to continue funding projects.

Rob Wagner is the editor of Construction Week.

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