Financial liberalization policy on some indicators of financial development in the State of Kuwait | ||||
| Aswan Journal of Agricultural and Biological Sciences | ||||
| Article 4, Volume 1, Issue 1, July 2025, Page 34-39 PDF (1.1 MB) | ||||
| Document Type: Research article | ||||
| DOI: 10.21608/ajabs.2025.400486.1008 | ||||
 View on SCiNiTO | ||||
| Author | ||||
Nawaf Hisham Rashid Hamad Saleh 
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| Institute of African & Nile States Researches & Studies, Aswan University. | ||||
| Abstract | ||||
| Financial liberalization is a relatively recent phenomenon that emerged as part of broader economic liberalization efforts, driven by significant global changes in the 1960s and 1970s. These changes led to the removal of restrictions and increased competition among financial institutions by liberalizing financial and banking services and adopting market-based mechanisms for setting interest rates. Like many countries, Kuwait initiated reforms aimed at modernizing its financial and banking sector. This began with the removal of administrative controls on interest rates and asset structures, followed by a shift toward market-based monetary tools. The reform agenda focused on rehabilitating banks to enhance their role in mobilizing and redistributing resources, supported by legal and regulatory adjustments, sectoral liberalization, and recapitalization efforts. This study explores the impact of financial liberalization in Kuwait between 1991 and 2020, with particular attention to monetary depth, financial market activity, and overall sector development. Three key hypotheses are tested: (1) financial liberalization contributes to monetary depth; (2) it positively impacts financial development; and (3) it enhances financial market activity. The study finds that while financial liberalization has advanced sector development, it remains insufficient to fully align Kuwait’s financial sector with global market demands. Recommendations include enhancing the investment climate, modernizing financial institutions and legal frameworks, integrating with global markets, supporting local industries, encouraging foreign direct investment, and diversifying public revenues beyond oil through strategic tax incentives. These measures are vital to sustain long-term financial development and economic growth in Kuwait. | ||||
| Keywords | ||||
| Financial liberalization policies; Level of activity of Kuwaiti financial markets; Financial development of the State of Kuwait | ||||
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