Saturday, March 15, 2008

Even as Kuwait and Gulf Region face the 3rd driest winter in over 50 years, Kuwait will invest $77billion dollars or more in a single new project to b

Even as Kuwait and Gulf Region face the 3rd driest winter in over 50 years, Kuwait will invest $77billion dollars or more in a single new project to bring more people and development to the Gulf

By Kevin Stoda

In contrast to the USA in 2008, Kuwaiti investors and government appear to have a magnificently positive attitude towards investment.

This past February 2008, the government and Kuwaiti investors reported the opening of the largest investment project in history—on the border of Iraq—and a short distance from Iran.

This large investment, expected to cost over $77 billion dollars, is taking place even though Kuwait—as a potential future home to migrants from all continents—has many strikes against it.

The project is called, “The City of Silk”. The name is based on the fact that one of the famous ancient silk routes had passed for centuries through the tiny region where present day Iraq and Kuwait are situated.

Strike One!

In February 2008, meteorologists reported that the region of Kuwait was suffering the third driest winter since 1957. Twice in four days Kuwait suffered major dust storms in late February and more storms in March. Usually these storms occur only in late spring or early fall.

Rumors are abound in Kuwait currently that the meteorological community is predicting that summer 2008 may be one of the hottest in memory as well—as little or no spring rain arrives.

Kuwait is already annually number one or number two in the heat index each summer.

Strike Two

In anticipation of Earth Day 2007, scientists in, Ker Than and Andrea Thompson, had already predicted that between 2008 and 2018 (Kuwait and) the world will have reached its peak production capacity in petroleum.

These two futurologists predicted that by 2020, at the latest, “global oil production will begin an irreversible decline, possibly triggering a global recession, food shortages and conflict between nations over dwindling oil supplies.”

Let the world not forget that one of the albeit-er claims evoked by Saddam Hussein in his country’s 1990 invasion and occupation of Kuwait was, namely, that Kuwait was drilling into its oil fields!

Currently, Kuwait is also planning a great expansion of oil exploration and development on the Iraq border. Couldn’t history repeat and war break out again some day over oil or water in the region?

Such a large multibillion dollar investment at a time when the Iraqi neighbor remains so politically unstable would appear to be like bating a lion.

Strike Three

Israel has been buzzing with rumors for more than a year that if the USA doesn’t get involved in a military conflict with Iran in 2008, it will likely send some sort of attacking force against nuclear related facilities.

Such rumors have been rampant since 2005 when U.S. Vice-President Dick Cheney first claimed that the U.S. was holding Israel on a leash to not attack Iran.

A new impetus for Israel to go ballistic (not just metaphorically) occurred in early February 2008 as Iran launched a rocket into space. The Israeli Institute for National Security has responded this month of March with a report on that rocket test.

Luckily, for world oil prices, the Iranian launch of its own rocket is seen by most level-headed analysts as simply a step towards increasing national pride in its Persian science and rocket achievements—i.e. not as posing much of a new threat to the region since Iran had already launched Russian built rockets over the previous three years.


According to the official hype on the humongous project, “Silk City” will take shape on islands and wetlands south of where the Euphrates River flows into the Persian Gulf.

Official statements from the organizers of the mammoth project explain:

“The oil-rich Gulf state of Kuwait plans to build a major new city inspired by the Silk Road that it hopes will become a global trade and tourist attraction. . . . The $77 billion ‘City of Silk’ aims to revive the ancient trade route by becoming a major free trade zone linking central Asia with Europe.”

It will be larger than any other development in the Middle East, topping even the magnificent scale of projects in Dubai.

Although the government of Kuwait has not fully signed off on the project yet, it should be noted that with oil moneys flooding into Kuwait currently at such a high rate, this probably Kuwait’s only opportunity to overcome its 2 decade-long economic decline in regional political-economic strength and build for the long-term.

This investment project would enable Kuwait to keep many of the fast-arriving petrodollars from simply making capital flight, i.e. if there are any downturns in the global, regional or local economy.

Moreover, the Kuwait Investment Authority alone, has currently some $225 billion dollars on hand for investment. It is one of the largest sovereign wealth funds in the world.

In addition, there are Saudi investors and other regional investors—possibly even from Iran or Iraq--who potentially will be able to chip in, too.

Meanwhile, with the USA economy in the dregs, investors from the USA are looking to the Persian Gulf as one region to take their funds and capital to these days.

Even after the U.S. Congress vetoed a UAE companies takeover of a major U.S. port two years back, the UAE and other regional states in the Gulf have continue to seek and receive U.S. investment.

Still, it would seem strange for any state or private investor to bet all their capital on projects in Kuwait, i.e. with a civil war raging still in Iraq—only miles from the “Silk City” investment site (and only a 50 to 100 miles from Iranian waters).

Moreover, as a lowland country, Kuwait is likely to be effected adversely by rising sea levels from global warming than many other nations around the world are. (Perhaps this is why, in fact, a whole new city is needed in the future.)

Nonetheless, like the builders of the Tower of Babel or the World Trade Towers, the designers of the Silk City project are prepared to move forward in this turbulent time and in a turbulent corner of the globe and build a leisure and trade center that the northern end of the Persian Gulf could certainly use as a development anchor for years to come.

If peace through infrastructural development is possible, perhaps this project should be attempted—even where the war-torn states of Kuwait, Iraq and Iran come together.



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