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Kuwait stands out in the region for its relatively open political system, which includes a freely-elected parliament that often clashes with a government appointed by the ruling Al-Sabahs. As a small state with vast oil wealth, it was a pioneer in establishing a sovereign wealth fund, but these days its economy lags behind its more commercially adept neighbours. The perennial stand-off between the executive and legislature often leads to policy gridlock, with neither side able to provide the bold leadership Kuwait needs to forge ahead

Iraq is buffeted by regional conflicts and domestic political and economic pressures; the dinar remains stressed and the population even more so. This is the first of a much-expanded series of GSN Risk management reports, in an online format intended to provide easy-to-access updates, analysis and contexts as a point of entry into this complex, often opaque region.

Slowing economic growth: The economy posted year-on-year growth of 2.5% in Q3 2023, according to data released by the Information and eGovernment Authority on 26 December. The expansion was led by the non-oil sector, which grew by 4.5%, offsetting a 6.8% decline in the oil sector. 

Kerman blast: Around 100 people were killed and nearly 300 injured in two explosions at a cemetery in the southern city of Kerman on 3 January, at an event marking the fourth anniversary of IRGC Quds force leader Qasem Soleimani’s death in a United States drone strike.

Red Sea attacks: Houthi forces launched missile and drone attacks against three commercial ships and a United States Navy vessel in the southern Red Sea on 3 December. The first attack targeted Bahamas-flagged bulk cargo ship Unity Explorer at 9:15 am Sanaa time, but the missile missed. Later in the day Unity Explorer was hit by another missile, causing minor damage.

Risk grades: Abu Dhabi A1, Dubai A2. RAK’s Russian links: A delegation from the Ural region of Russia visited Ras Al-Khaimah in early November, comprising business owners involved in real estate, engineering services, IT development, food production and investment.

Climate goals: Ahead of the COP28 climate talks in Dubai, the UAE has set out a national action plan to achieve climate neutrality by 2050 – while also remaining a world-leading oil producer.

China LNG deals: QatarEnergy has been lining up long-term sales contracts for its major North Field developments. It signed a deal on 4 November to sell 3m t/yr of liquefied natural gas (LNG) to China Petrochemical Corporation (Sinopec) over 27 years from the North Field South (NFS) expansion project. This followed a string of similar deals with European energy majors

Economic slump: The economy shrank by 4.5% year on year in Q3 2023, a sharp change from the 1.2% expansion reported in Q2 23. It was the first decline in real GDP since the start of Q1 21 and was entirely due to a slump in the oil and gas sector, where activity contracted by 17.3% yr/yr due to voluntary production cuts.

KIO allegations: Finance minister Fahd Al-Jarallah has referred the Kuwait Investment Authority’s London outpost, the Kuwait Investment Office (KIO), to the public prosecutor over a series of alleged offences including the illegal disclosure of confidential information between 2018-22. The move was announced by the Ministry of Finance on 16 October.

Gas privatisation: Shares in state energy firm OQ’s gas pipelines business OQ Gas Network (OQGN) began trading on the Muscat Stock Exchange on 24 October. OQGN had raised OR288m ($750m) in its initial public offering of 49% of its shares, making it Oman’s largest IPO, ahead of previous front-runner Oman Telecoms Company, which floated in 2005.

Turkish attacks: Türkiye (Turkey) launched a sustained aerial bombardment of Kurdistan Workers’ party (PKK) bases in the Kurdistan Region of Iraq (KRI) in early October, following a suicide bombing at the Ministry of Interior building in Ankara on the opening day of the month, a few hours ahead of the reopening of the Turkish parliament after a three-month summer recess.

Saladin governor warrant: An arrest warrant was issued by Iraq's Federal Commission of Integrity against a former governor of Saladin province, following accusations of corruption involving contracts for water services in the area. A statement by the commission on 7 October said the warrant had been issued under Article 331 of the Penal Code.

Grundberg diplomacy: United Nations special envoy Hans Grundberg has been meeting senior figures around the region, in an effort to inject new momentum into the peace process. He was in Riyadh on 9 August where he met Yemeni Presidential Leadership Council (PLC) head Rashad Al-Alimi, Prime Minister Maeen Abdulmalik, foreign minister Ahmed Bin Mubarak and Saudi ambassador to Yemen Mohamed Al-Jaber. The following week, Grundberg was in Muscat for talks with Foreign Ministry undersecretary Khalifa Al-Harthy and Houthi chief negotiator Mohammed Abdel Salam.