By Eman Al-Awadhi
KUWAIT, Jan 14 (KUNA) -- Globalization is an instrument that can be used to
restructure and diversify the Kuwaiti economy and reduce dependency on oil
revenues, said a Polish economic expert on Monday.
"With its abundant financial resources due to oil exports, Kuwait can
afford to invite global investors and high tech firms which can invest here in
joint venture projects, brining new technology, still better management and
marketing skills to orient more market output," said Grzegorz Kolodko,
Poland's former deputy premier and finance minister, to KUNA.
He said the "question of 'to be or not to be' for Kuwait's economic future"
depended on decreasing the dependency on oil as a main source of income for
Kolodko, who is current the director of the Warsaw-based Transformation,
Integration and Globalization Economic Research (TIGER), said that in terms of
economic diversification, Kuwait could base this on oil processing
petrochemical, chemical or pharmaceutical industries where oil resources could
"I think Kuwait has the potential to be an education and research center
and education is always a good investment," he added.
As for the hike in global prices of commodities in general, the expert said
Kuwait could benefit from an "oil for food" arrangement with such a country as
Poland, where "food security for Kuwait comes in exchange for energy security
for Poland .. the Gulf state can get food at competitive prices and also good
This, he explained, would "hamper" food inflation, warning that "inflation
is the beast that has the tendency to grow out of control."
The polish expert said, however, that if members of the Gulf Cooperation
Council (GCC) were to achieve currency convergence, "it must be done within an
optimal currency zone, which calls for low inflation and competitive exchange
rates at the day of introducing the new currency."
He said "currency union is the means to enhance the process of regional
integration, and this integration is a very good response of this part of the
world to globalization, the GCC states will have a much better chance to play
the global economic game within the context of regional integration than as
Kolodko said that although Gulf states were, in theory, far from being
within an optimal currency zone "large diversification of GDP per capita,
different rates of inflation, and different sizes of economies, there were
still successful examples of currency zones to be seen in the EU, the
Caribbean and Western Africa.
"In case of the Gulf, the common currency has a very strong political
context, and the political arguments are as important, if not more important,
than the economic ones because the common currency is a means of regional
integration," he noted.
He added that because of the outward nature of Gulf economies, as being
exporters rather than importers, the common currency "can perform a
tremendously positive job in bringing people together, instead of just the
factors of geography, religion and language, you will have a strong economic
compliment of political, cultural, and economic integration which will be a
very good driving force for the future."
The former Polish minister said the "future of the world is in more and
more currency zones," noting that in the case of the EU, the integration
process was "very much fueled by the common currency, much more than the
'European constitution, we can 'fly' without this political constitution, but
it would be difficult without a common currency."
Kolodko is in Kuwait on invitation by the American University in Kuwait
(AUK) to lecture on regional development in the context of ongoing
globalization. He also visited Qatar, Bahrain and Iran as part of his regional
Professor Grzegorz W. Kolodko -- a key architect of Polish reforms -- is a
renowned economist and a world expert on transition and development policy.
While deputy premier and finance minister (1994-1997), he led Poland to join
the OECD. Holding the same positions again in 2002-2003, he played an
important role in his country's integration with the EU.
He is the author of 35 books and over 300 articles and research papers that
are published in 23 languages around the globe. (end)
KUNA 140920 Jan 08NNNN