Diversifying Investments in Gulf Countries to Mitigate Financial Risks from Oil Price Volatility: A Case of Kuwait

The Kuwait and other countries of the Gulf Cooperation Council (GCC) have traditionally based their economic model on the receipts from the sales of oil. Fluctuations in the price of oil in the global markets has since rendered these economies more vulnerable to such financial risks and through policymaking, the economies have started to look for ways of diversifying on the risks. While the world today is working towards a new energy mix, those changes toward renewables and sustainability have led the reliance on oil towards economic, strategic and developmental issues. For Kuwait, a country that depends on oil as its major source of export, the issue of diversifying the country’s investment portfolio is even more important. It is stated that Kuwait needs to diversify investments to minimise the risk linked with fluctuating oil prices. With regards to this study, the analyses of the current state of economy of Kuwait, the impacts of instability of oil prices and the possible opportunities for diversification of investments will help in a more informed understanding of how Kuwait can better ensure a sustainable economy.