The public sector runs the Government's affairs and comprises over 30 ministries, public authorities and institutes. The major ministries are defense, oil, public works, finance and planning, interior, health, education, communications and electricity and water.
A number of major projects are under way within the various ministries. Current projects include extensions to the highway system, construction of three electricity sub-stations, redevelopment of the Kuwait University campuses and a very large construction project of an industrial water treatment plant in Sulaibiya with a capacity of 16 million gallons per day. Five consortiam have been approved in the pre-tender qualification and bids for the water treatment project which is valued at upwards of $250 million are expected to be submitted in early 1999. This list continues to grow and is by no means exhaustive, but serves to illustrate the scale and variety of current projects.
One of the largest public authorities is the Public Housing Authority, which is responsible for meeting the increasing demand for housing. A number of projects are on the drawing board, including a new city at Subiya in the north eastern part of Kuwait. This will involve the construction of a multi-lane causeway across Kuwait bay. It is very likely that this project will involve private sector participation which will help to reduce the growing demands on the budget.
The state-owned Touristic Enterprises Company (TEC) manages most of Kuwait's tourist facilities, including the famous Kuwait Towers a landmark and emblem of Kuwait, the Entertainment City at Doha, sea club developments along the coastline including a luxury development at Khiran near the border with Saudi Arabia. TEC is involved in a number of schemes that are expected to open in 1999, the major one being the underwater aquarium and Imax theatre complex in Salmiya with funding coming from the Kuwait Foundation for the Advancement of Sciences (KFAS).
The Kuwait Investment Authority (KIA) is the Government agency responsible for the state shareholdings in upwards of 60 local companies. In 1994, KIA commenced the sale of these shareholdings in a privatization program that is expected to be completed by the year 2002. Public offerings or placements take place on a planned regular basis to avoid an over supply situation and meet the regular demands of the market. The Government plans to privatize the Public Utilities through KIA with the first utility likely to be the Ministry of Communications. The major stumbling block has been the problem of reduced manpower that will be the result of any privatization.
Kuwait Airways (KAC) is another public utility that may be privatized with the Government retaining a 40% share and a further 10% being allocated for KAC staff. KAC has undergone a fleet modernization program with two Boeing 777's recently added to the fleet of 18. The attendants received their new uniforms in 1998 and its on-board services have been upgraded to bring its standards of customer care into line with the world's top airlines.
Banking and Finance
The Central Bank of Kuwait (CBK) is the Government's sole agent for control of monetary policy and the supervision of banks, insurance and investment companies. There are six Kuwaiti-owned commercial banks " Al Ahli Bank, the Bank of Kuwait and the Middle East, Burgan Bank, the Commercial Bank of Kuwait, Gulf Bank and the National Bank of Kuwait. In addition, there is the Kuwait Finance House which is a Kuwaiti-owned Islamic financial institution offering Islamic banking services. The Bank of Bahrain and Kuwait (BBK) is a 50% locally-owned branch. Also, there are three specialist banks " the Industrial Bank of Kuwait, the Kuwait Real Estate Bank and the Savings and Credit Bank (SCB).
Consolidated total assets of the commercial and specialist banks (except BBK and SCB) were over $42 billion at the end of 1987. Total shareholder's funds were $4.2 billion which represent very healthy debt-to-equity ratios in line with the world's top banks. Distribution of bank credit to the private sector was mainly in personal facilities.
There are four partially state owned Insurance Companies " Al-Ahleia Insurance Company, Gulf Insurance Company, Kuwait Insurance Company and Warba Insurance Company. These companies insure all risks of the State owned or partially owned companies as well as participate with overseas insurance companies for the insurance needs of the private sector. For the year 1997, these companies had total net premium income of $75 million and have total Assets in excess of $750 million.
The Kuwaiti Dinar (KD) is a freely convertible currency. It floats against a trade weighted basket of currencies with daily fixing. The U.S. Dollar is the dominant currency in the basket as it represents about 60 % of trade. Consequently, the KD has remained relatively stable against the U.S. Dollar since 1993 ranging from a low of 297.62 fils per US$ to a high of 305.57 fils (there are 1000 fils per Kuwaiti Dinar).
The Discount Rate " against which all local commercial rates are linked " is set by the Central Bank of Kuwait and has also been relatively stable during the 1990s. It has ranged from a low of 5.75% for most of 1994 to a high of 7.5% in early 1993. The policy of stable interest and exchange rates provides the required fertile ground for sound economic growth.
The Kuwait Stock Exchange officially regulated trading in 1983. Trading previously had been on an informal basis. In 1995, the Exchange introduced electronic trading that eliminated settlement delays. Quoted companies fall into eight main sectors: Banking, Investment, Insurance, Real Estate, Industrial, Services, Foodstuffs and non-Kuwaiti companies. For the year 1997, there were 588,172 deals transacted representing a turnover of $35 billion of which over 50% was in the Investment and Real Estate sectors. There are moves afoot to expand the market by allowing non-GCC nationals to participate in the market.
A number of major projects are under way within the various ministries. Current projects include extensions to the highway system, construction of three electricity sub-stations, redevelopment of the 
The Discount Rate " against which all local commercial rates are linked " is set by the Central Bank of Kuwait and has also been relatively stable during the 1990s. It has ranged from a low of 5.75% for most of 1994 to a high of 7.5% in early 1993. The policy of stable interest and exchange rates provides the required fertile ground for sound economic growth.
