What’s behind the growth of Kuwait’s informal economy

Souqs and bazaars are an integral part of the Arab world and in Kuwait, the bazaar mentality – the ideas of mercantilism, entrepreneurship and working for oneself – are deeply rooted. In fact, the country was founded by merchants – risk takers who not only traded goods but who within a few short generations also pioneered what are today some of the leading businesses in Kuwait. Start ups are as common as cupcakes in the region. But in Kuwait, the growth of an informal economy is taking the country in a decidedly different direction from its GCC neighbors, a trend that could have a lasting impact on Kuwait’s economic future.

The costs of doing business

Despite recent government approval of a new law aimed at promoting small and medium enterprises (SMEs), opening a business here can be a nightmare of wasted time, unnecessary costs and lengthy delays. Kuwait’s labyrinth-like bureaucracy, a growing bribe culture among public officials and a wasta like network that make it hard, if not nearly impossible for young entrepreneurs to enter the market.

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What’s behind the growth of Kuwait’s informal economy