Publication: Kuwait : Fostering Sustainable Investment through Modern Commercial Law Systems
Loading...
Published
2013-04
ISSN
Date
2013-10-11
Editor(s)
Abstract
The Government of Kuwait (GOK) is now moving decisively to reform its insolvency and creditor/debtor regime (ICR). Stakeholders recognize that Kuwait's ICR system had fallen behind that required for a modern economy. The GOK's effort to establish a modern insolvency and creditor rights system is driven by several considerations: first, consistent with its traditional strengths, Kuwait is seeking to transform itself into a regional financial and trading center, as expressed in the Amiri vision 2030 and the GOK's most-recent five-year development plan. Second, many of the difficulties afflicting the country's investment company sector, which started surfacing in 2008, still await fundamental resolution. Third, development of small and medium enterprises (SMEs) is essential to help the GOK meet its goals of diversifying the sources of income and encouraging young people to work in the private sector, in order to reduce the burden of the public sector. The GOK's reform agenda aspires to world-class standards, balancing international norms with solutions rooted in Kuwait's unique local customs. The consensus among stakeholders is that an effective insolvency regime would benefit the Kuwait economy.
Link to Data Set
Citation
“Mako, William; Mokal, Riz; Cojocaru, Iulia; Johnson, Gordon W.. 2013. Kuwait : Fostering Sustainable Investment through Modern Commercial Law Systems. MENA Knowledge and Learning Quick Notes Series;No. 93. © World Bank. http://hdl.handle.net/10986/16124 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Republic of Serbia Financial Sector Assessment Program Update(Washington, DC, 2009-10)Nonperforming Loans (NPLs) in the banking system constituted 16.5 percent of total loans, owing primarily to the corporate sector. The Credit Bureau, maintained by the Association of Serbian Banks, also discloses dramatic increases in corporate and retail defaults over the past year. NPL resolution and loan loss mitigation is hampered by a still evolving but uneven collateral and enforcement framework that complicates restructuring and leads to delays and lower recoveries in execution procedures. Corporate debt resolution is further complicated by a pattern of corporate misconduct designed to circumvent a creditor's legitimate enforcement rights. This is particularly acute in response to account blockages. In an effort to survive, business owners frequently engage in a pattern of corporate fraud to avoid their legitimate obligations by creating alter ego or shell companies through which to conduct their ongoing business activities, with all funds passing through the new legal entity. That entity is free from debt and can open bank accounts, engage in contracts, and carry on business as usual using the corporate assets of the prior legal entity under cleverly disguised lease or contractual use obligations. In most modern economies, such practices constitute fraud or fraudulent transfers that can carry stiff penalties, including loss of business privileges. Other reported abuses include applying for voluntary dissolution during which the owner or a friendly receiver continues to operate the business for years in an apparent wind-down of the business, while ignoring creditor claims.Publication A Global View of Business Insolvency Systems(Washington, DC: World Bank and Brill, 2010)The purpose of this book is to provide a coherent overview of the insolvency systems found around the world. Its intended audience includes academics, judges, lawyers, and policymakers. Its focus is on businesses rather than natural persons. The authors hope to give the reader a sense of some of the principal approaches to managing the general default of a business debtor. The authors will discuss the nature of the costs and benefits arising from the various policy choices legislators have made. In the process, they will emphasize the close interrelationship among various elements of an insolvency regime so that these elements can be viewed as part of an overall system and not just as a series of policy decisions about particular rules, such as the method of initiation of an insolvency case or the balance struck in setting the boundaries of an avoidance power. The organization of the book reflects our view of insolvency laws as complete systems, including not only the 'insolvency' or 'bankruptcy' code of a jurisdiction but also closely related laws and the institutional framework in which those laws are applied. The book takes a systematic approach to a variety of topics related to credit and insolvency regulation. The functional analysis starts with the study of debt enforcement, continues with an examination of general corporate insolvency legislation, corporate rehabilitation proceedings, informal workouts, employee rights, judicial and administrative institutions, and the considerations key to cross-border insolvency proceedings.Publication “No Way Out” : The Lack of Efficient Insolvency Regimes in the MENA Region(2011-03-01)This paper provides a comparative summary of the payout phase of insolvency systems in the MENA Region. Countries in the region generally have weaker restructuring and liquidation systems than those in most other regions. The paper summarizes many of the weaknesses common across the region.Publication Colombia : Creditor Rights and Insolvency Proceedings(World Bank, Washington, DC, 2006-05)This article analyzes the legislation and institutions connected with creditor rights and insolvency proceedings in Colombia. It aims to contribute to the debate on the conditions required to restore the vitality of the Colombian credit environment. In relation to creditor rights, there is a particular emphasis on mechanisms for establishing security interests used in granting corporate credit. The analysis identifies the principal factors affecting the efficiency of security interests. These include deficiencies in substantive and procedural law, as well as in registry organization. The paper goes on to analyze the legal, institutional and regulatory framework for insolvency proceedings, identifying weaknesses and highlighting strengths that insolvency reforms should aim to preserve. The need for attention to corporate workouts and prepackaged reorganization agreements is also addressed. The paper concludes with prioritized recommendations for a plan of legal and institutional reform intended to improve the credit environment, creditor protection and enable the establishment of a more balanced insolvency system. Applying the recommendations to Senate Bill 207/05 (Insolvency Regime) makes it possible to identify the strengths of the Bill, as well as refinements that might be considered so as to reduce the legal uncertainty, which limits the growth of banking credit in Colombia, and to achieve a reduction in credit costs, particularly for small and mid-sized companies.Publication Mali Financial Sector Assessment Program(Washington, DC, 2015-12)A country’s legal and judicial environment can help or hinder access to credit. In addition to the banking law governing the organization of the sector, the operations of credit institutions are subject to several laws. Four components of Malian business law are particularly relevant in assessing the position of creditors, the law on secured transactions, the law on collective proceedings, the law on information-sharing related to debtors (sometimes called the credit reporting law), and the law on collection and enforcement proceedings. If creditors cannot have confidence in their legal environment, they will be inclined to lend only to persons they know well. In this regard, it is telling to note that in Mali, the 50 biggest clients account for 39.3 percent of the credit extended by banks (although this percentage has fallen in recent times). Furthermore, access to credit remains a major constraint in the Malian business world. Although the reasons are not confined solely to the legal sphere, it is important to point out that, according to the 2010 Enterprise Survey, Malian enterprises cited access to credit as the main constraint hampering the business environment (43.9 percent of enterprises). The same study showed that in the case of loans involving a security right, the value of the assets pledged stood at 201.4 percent of the amount borrowed, reflecting the lack of confidence by banks in their ability to actually enforce their rights. In addition, in view of the fact that 58 percent of loans require a pledged asset which, in most instances, takes the form of immovable property, persons who do not own such assets are, de facto, shut out of the system and unable to seek credit.
Users also downloaded
Showing related downloaded files
Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Regional Poverty and Inequality Update: Latin America and the Caribbean, October 2025(Washington, DC: World Bank, 2025-10-23)This brief summarizes recent facts related to poverty and inequality in Latin America and the Caribbean (LAC) using the latest wave of harmonized household surveys from the Socio-Economic Database for LAC (SEDLAC). This brief was produced by the Poverty Global Practice in the LAC Region of the World Bank.Publication Thailand Monthly Economic Monitor, October 2025(Washington, DC: World Bank, 2025-10-22)Fiscal conditions remained stable, with a modest widening of the deficit to 3.1 percent of GDP. New stimulus measures are expected to support short-term demand without breaching the public debt ceiling. Inflation stayed negative, reflecting lower energy and food prices amid subdued domestic demand. The central bank kept the policy rate unchanged, citing limited policy space. Thailand’s growth momentum has slowed further as manufacturing activity and services weakened as projected. Tourism remained subdued, largely due to fewer Chinese visitors. Goods exports also slowed as earlier front-loaded orders faded, particularly in agriculture and industrial goods. The Thai baht depreciated in early October as the US dollar appreciated and the current account turned negative.Publication China’s Marriage Market and Upcoming Challenges for Elderly Men(2010-06-01)Fertility decline has fueled a sharp increase in the proportion of 'missing girls' in China, so an increasing share of males will fail to marry, and will face old age without the support normally provided by wives and children. This paper shows that historically, China has had nearly-universal marriage for women and a very competitive market for men. Lower-educated men experience higher rates of bachelorhood while women favor men with better prospects, migrating if needed from poorer to wealthier areas. The authors examine the anticipated effects of this combination of bride shortage and hypergamy, for different regions of China. Their projections indicate that unmarried males will likely be concentrated in poorer provinces with low fiscal ability to provide social protection to their citizens. Such geographic concentration of unmarried males could be socially disruptive, and the paper s findings suggest a need to expand the coverage of social protection programs financed substantially by the central government.Publication Financial Services for Developing Small-Scale Irrigation in Sub-Saharan Africa(World Bank, Washington, DC, 2008-09)Food insecurity and income poverty are rampant in Sub-Saharan Africa. Thirty-one percent of children under the age of five are malnourished and some 72 percent of the population lives on less than US$2 day. Forty-one percent lives on less than US$1 day. The impoverished and hungry are concentrated disproportionately in rural areas and rely mainly on the consumption and sale of agricultural produce for their food and income. Africa has experienced increasing dependency on food imports that its countries cannot afford. Yet an estimated 700,000 hectares of arable land in Africa remains uncultivated. It is land that could become productive through small-scale irrigation using basic technology to draw on small-water resources, such as tube wells, and dambos. The technologies can be applied to cultivate smallholder plots of up to five hectares. Employing them will enable up to 4 million low-income households to intensify agricultural production and increase productivity. Small-scale irrigation can increase agricultural productivity and production, thus contributing to economic growth in rural areas and increased well-being among small holder farmers. Its potential to increase and stabilize food supply is especially important in light of the ongoing food crisis, and especially in Africa. Expanding the use of small-scale irrigation requires farmers to have access to financial services. The many constraints and obstacles that rural financial institutions in Africa confront must be purposefully navigated if financial services are to fulfill this role. Effectively tailoring financial services and products to support irrigation in different settings and among different client groups will be essential to success. Carefully targeting grant funding to the very poorest subsistence farmers and clearly separating it from lending will be likewise be critical to the sustainability of these financial services.