Water in Kuwait: Building a research agenda for ...

Water in Kuwait: Building a research agenda for practical policy impact and student experiential learning

Ali Aljamal Chair, Department of Economics College of Business and Economics American University of Kuwait P.O. Box 3323, Safat 13034, Kuwait. [email protected] Mark Speece College of Business and Economics American University of Kuwait P.O. Box 3323, Safat 13034, Kuwait email: [email protected] Mohsen A. Bagnied Chair, Department of Marketing College of Business and Economics American University of Kuwait P.O. Box 3323, Safat 13034, Kuwait [email protected]

presented at GIKA 2016 6 Global Innovation and Knowledge Academy th

Valencia, Spain 20-23 March, 2016

brief bios Ali Aljamal is an Assistant Professor of Economics and Chair of the Economics Department at the American University of Kuwait. In addition to teaching a variety of economics courses, his research interests include food security, resource conservation, environmental and natural resources policy, and economic education. His PhD in agricultural economics is from University of Arizona, where his dissertation was on water policy and management. Current research is on resource management issues. Mark Speece is Associate Professor of Marketing at American University of Kuwait. Much of his career before moving to Kuwait was in Southeast Asia, where taught in Bangkok, Singapore, and Hong Kong. He is still an adjunct in the PhD program at Dhurakij Pundit University International College, Bangkok. His PhD in marketing is from University of Washington. He also holds a PhD in Middle East economic geography from University of Arizona. Mohsen Bagnied is Associate Professor and Chair of Marketing at American University of Kuwait. He had extensive consulting experience for Egyptian, American, and international organizations before entering academia, and he also taught for nearly 20 years in the USA before joining AUK. His PhD in agricultural economics is from University of Maryland, and he has 2 years of post-doctorate training in marketing from George Washington University.

Water in Kuwait: Building a research agenda for practical policy impact and student experiential learning

Abstract This paper describes development of a research agenda in the College of Business & Economics at a small private university in Kuwait. One driving factor is the need to satisfy AACSB requirements. AACSB likes to see strong development of student analytic and decision-making skills, as well as a reasonable level of ‘scholarly contributions’. Action research and experiential learning methods are well suited to these goals. The research agenda was developed around ‘water’, which is a critical issue in Kuwait. It was constructed to integrate themes from the whole supply chain, starting with raw materials and ending with consumer consumption and use of water. Thus, it can incorporate a wide range of interests in economics and marketing. The projects in the agenda are usually conducted as part of interaction with government entities and private organizations involved in some way with water.

Introduction This paper is a case study about developing a coherent research agenda in the College of Business & Economics at American University of Kuwait (AUK), a small university in Kuwait. The university is currently in the process of seeking accreditation by AACSB, which encourages ‘impactful’ research. Partly this is measured by traditional metrics, such as quality of journals and conferences where work appears, and article citations. However, partly it is assessed by looking at whether the research addresses important issues relevant to external audiences, who then use it (AACSB 2015). Thus, the initial motivation for beginning to think about such a research agenda was the need to meet AACSB requirements for ‘intellectual contributions’. Generally AUK has been a teaching school, where the faculty has mostly not been used to doing much academic research and has little support for research. Kelly (2011), for example, discusses the difficulty of conducting research in the AUK environment. However, many faculty are engaged with the local business community and government, and work on projects with the commercial and government sectors, sometimes in a consulting role, sometimes bringing external material and speakers into classes. Of course, this all counts for AACSB in terms of engagement with external stakeholders, and AACSB likes to see it, but most of it is not ‘intellectual contributions’ in the scholarly sense. Fortunately, with an active faculty, it is not very difficult to turn much of what they do into ‘intellectual contributions’ scholarship. The task is to foster scholarly contributions in a way that enhances, rather than sacrifices, external engagement, and in a way that pulls even more real-world issues into the classroom. Our small research team organized an agenda two years ago to focus on water issues. The plan has multiple objectives, including targeting government entities

concerned with water, involvement of students, use of research results as classroom material, use of results for publication in academic journals, and integration across several disciplines (notably marketing and economics). This paper discusses these issues. Some brief discussion of results is occasionally included to illustrate how they are useful to external organizations, how they can be used in classes, and how the agenda can be integrated across marketing and economics. However, the paper does not aim to show detailed results of any one project, many of which are still ongoing. Action research and experiential learning Two related themes in business research and education provided guidance in how to do develop such a research agenda: ‘participatory action research’ (PAR) and ‘experiential learning’. In action research, “close collaboration with the research object and its practical problem solving is part of the research process” (Eriksson & Kovalainen 2008, p. 193). The research problems are issues which local stakeholders must understand so that they can make good decisions to deal with them. “In PAR, professional researchers do not enter communities to conduct studies on community members. Rather, they form partnerships with community members to identify issues of local importance, develop ways of studying them, collect and interpret data, and take action on the resulting knowledge” (Smith et al 2010, pp. 407-408). For example, in a recent GIKA conference, Wolk et al (2013) reported on the use of action research among rural entrepreneurs in Alaska. “Integration of action research methods and entrepreneurial processes should be a joint effort of collaboration between action researchers and entrepreneurs … The PAR methodology helps to facilitate learning for the rural entrepreneur that helps them to become better at entrepreneurship, to improve skills that become more important as a business grows and becomes more complex to run … The action researcher is able to assist with process, with help in answering questions about how to make decisions” (p. 14; see also Rasmussen & Nielsen 2004; Sarasvathy & Dew 2005). In most of our projects, a key component of the work is recommendations to the ‘client’. Especially in a business school environment, it is critical that students understand that ‘analysis’ is only the first step of what managers must do. Students must be “able to translate knowledge of business and management into practice” (AACSB 2015, p. 32), i.e., given the knowledge they have acquired about the issue, they must be able to recommend realistic decisions about what to do. And, government agencies as well as business entities, are more forthcoming in cooperation for access to data if they feel they might learn something useful for their operations. From the student side, this is essentially experiential learning. Such methods essentially shift more responsibility to students, who must actively participate in developing their knowledge and skills by working on various projects, rather than relying

on teachers to tell them what to think in lectures. Teacher responsibility does not diminish, but it shifts toward being a guide and project manager rather than the source of knowledge. The purpose of getting students more involved in the learning process is to enhance learning – generally, a more active engagement process produces better learning outcomes. There is plenty of research to back this up, as quick perusal of several handbooks on experiential learning will show (e.g., Reynolds & Vince 2007; Silberman 2007). While not as common as other forms of experiential learning, community-based projects are certainly used in higher education (e.g., Pain et al 2013). Experiential learning methods started gaining more traction in business education more than a decade ago, although they still do not seem predominant. Reynolds (2009), among others, shows something of the resistance to such methods in management fields. AACSB aims to overcome such resistance and currently pushes experiential learning: “Curricula facilitate and encourage active student engagement in learning. In addition to time on task related to readings, course participation, knowledge development, projects, and assignments, students engage in experiential and active learning designed to improve skills and the application of knowledge in practice is expected” (AACSB 2015, p. 29). Similar language appears frequently in the AACSB standards document. Experiential learning methods do work outside the West, although they may require some adaptation to culture (e.g., Valiente 2008; Javalgi et al 2009). For example, Speece (2002, 2003) discusses their use in Southeast Asia, where cultures make it difficult to simply transfer Western versions of experiential learning without adaptation. However, partly, it is not culture, but simply conservatism which hinders adoption (as sometimes in the West). Even the standard case study method is not very widespread yet in the Middle East; e.g.: “Although a century old, the case method still remains an innovation for many Turkish institutions teaching management” (Apaydin 2008, p. 681). Nevertheless, Arab CEOs are clear that they want business education to shift away from memorization, to development of critical thinking skills, and they want somewhat less theory and more practical application (Lootah & Simon 2009). Experiential learning is an excellent way to do this. At any rate, clearly action research and experiential learning methods can be merged to accomplish the key objectives our research team had when it started out considering these issues. The research itself focuses on contributing to solutions to important problems external stakeholders must grapple with, and student involvement in the research gives them experience dealing with these real-world issues. The outcomes of research include recommendations to the ‘clients’ based on analysis of data relevant to the specific problem. For students, there is no pre-determined answer to be found in the book which can be memorized for the next exam.

Water A small research team of three faculty in economics and marketing started by outlining a framework for long-term research which could address critical issues in Kuwait while bringing together the expertise of those faculty. We decided to focus on natural resource issues – the key ones in Kuwait are energy, water, and food. However, unlike very discipline-based work, we looked broadly at the whole supply chain, from primary production to final consumption, as schematically represented in Figure 1. These issues are not isolated, but interconnected; action in one stage will affect things in other stages. The issues below the line in Figure 1 (manpower, finance) simply show obvious areas where other faculty could become involved in the future – this is illustrative, not exhaustive. The focus on natural resources and sustainability also gives clear overlap with other programs outside the College of Business & Economics, notably a small Environmental Policy program in the College of Arts & Sciences. Figure 1: Framework for natural resources management issues management of resource production

management of supply chain

management of demand

energy water food

multiple levels, value-added stages & logistics between

consumption patterns waste / conservation sustainable use

manpower (skills) finance

manpower (skills) finance

manpower (skills)

While we have a few small activities related to food and energy, the core problem tying our main research focus together water. Kuwait lies in a very arid region, and has limited options for sustainable water supply. The country depends almost entirely on manufactured water from thermal desalinization plants. Kuwait’s oil wealth has been a mixed blessing in terms of water – the country could afford the technology and operating costs, but wealth has fostered extensive State subsidies, and massive waste. Kuwait’s per capita water consumption is among the world’s highest, production is costly, and the production process is starting to damage the Gulf environment. This cannot be sustained very much longer, and Kuwait needs to find solutions soon. We are not primarily interested in, for example, simply helping branded bottled water companies gain market share, even though that would certainly be an appropriate problem for marketing students in some parts of the world. Some bottled water sold in Kuwait is imported, but the majority is brands of private companies, both local and foreign, which bottle the government’s manufactured water they bought at the subsidy rate. Projects simply aiming at improving market share for one or another brand would

do little to address the underlying water problem in Kuwait. Most projects need to be tied to issues which can have some policy impact. Key government entities include the Ministry of Electricity & Water (MEW), which is exploring options to reduce demand. Several projects have addressed consumer response to reducing subsidies, and how such a reduction might need to be presented to gain acceptance. The Environmental Protection Agency similarly aims to reduce production to reduce the pressure on the environment. The Kuwait Institute of Scientific Research works on developing and adapting technologies for water production. KISR is currently developing cheaper reverse osmosis methods and has an experimental bottling plant to assess feasibility of mass production. In the absence of commercial or private water providers, MEW is the sole water producer and distributor. It behaves like a natural monopoly, while water is treated like a public good. Water rates based on just eight percent of private cost of production were set decades ago, and they have never been revisited since then. This has further reinforced the perception among Kuwaiti households that water is a public good. MEW’s response to water sustainability issues has consistently been supply oriented at best; that is, to procure additional supply of water to keep up with the bourgeoning demand. Demand-side management, if any, has been mainly focused on a moral suasion approach, which has made no noticeable difference. Scientists at EPA and KISR have been actively engaged in research on water production. EPA’s focus has been on the environmental degradation due to production through desalination. The impact of negative externalities in production on air and the Gulf, the primary source of water, are obvious and must be addressed. KISR’s focus, among others, has been on articulating smaller scale water production options that are more sustainable, economically-feasible, and less environmentally-damaging. Most projects in our research agenda relate to issues in which these three government organizations have some interest. The projects also need to get students involved. Partly this is through a few specific students who show promise as researchers, and are hired as research assistants. However, some of the projects are integrated into marketing classes and economics classes. For example, KISR has developed an innovative membrane technology which can produce fresh water much more cheaply than thermal desalination, and is working on scaling up. The have an experimental bottling plant, which they recently expanded, and aim to market their own bottled water brand to demonstrate that the technology is feasible for large volumes and can be accepted by consumers. The marketing strategy capstone course has adopted the problem of commercialization of a KISR brand of bottled water as its external consulting project. Students groups are researching several aspects of marketing the new brand, to give recommendations to KISR at the end of the semester. The KISR project manager has been a guest speaker in the class to outline what KISR aims to accomplish. The

environmental economics class is looking at how and how much the KISR technology will reduce external costs if it succeeds. Both classes went on a field trip recently to see the bottling plant in operation. Two students are working on the external economy associated with large scale water production through desalination, and market-based options to manage water demand. Current production decisions are primarily based on private cost, while consideration of the third party impact is almost absent. There are signs of a paradigm shift, in the sense that future water, and energy, production plants are stipulated to be environment-friendly. Another student in the environmental economics class is interested in a framework capable of assessing the magnitude of the external cost and user cost of water production, and alternative policy options to internalize them. Another student is interested in water pricing strategies and alternative water rate structures to manage water demand. In addition, we aim to understand the entire value-added chain. Figure 2 illustrates schematically the way the whole research agenda is built around the problem of looming water shortages in Kuwait. Production, distribution, and demand from Figure 1 all play a role in managing water in Kuwait. Whatever happens in one of these areas has impact on the others. The set of projects needs to look at all the current production systems, which include use of groundwater, thermal desalination, and the experimental reverse osmosis production by KISR. Kuwait has one limited freshwater aquifer, and a natural spring is currently the source for one brand of bottled water. It cannot be sustainably used much as a source for high volume tap water. Thermal desalination supplies most water, and KISR and others have ongoing projects to develop less expensive and less environmentally damaging thermal technologies. As noted, KISR also works on membrane technologies, which looks promising to become a third important production system. Distribution of fresh water is currently by pipeline, by water truck, and bottled water. MEW is charged with municipal water delivery through a network of water mains throughout Kuwait. Originally, MEW supplied water through two separate water networks, potable fresh water for indoor use, and Saleeby (brackish, salinity ≈ 3000 ppm) water for outdoor use. Not all connections of potable water are metered, although MEW is becoming strict on water metering. Typically a transfer of house ownership now triggers MEW to verify the presence of water meter. Saleeby water has always been unmetered. Supply of Saleeby is being phased out, although houses already on this pipe network still receive it three days a week.

Figure 2: The water research agenda economics issues for class projects

production technologies:

the problem:

demand issues:

spring / groundwater; thermal desalination; reverse osmosis

looming water shortages

tap water wastage; usage from water tanks; commercialization of cheaper production

water distribution: pipeline system; water trucks; bottled water

marketing issues for class projects

generation of data to inform student class projects in marketing management and economic / environmental policy; generation of new problems for further research by students; use of data in teaching to show local applications

Water prices cover only eight percent of production costs, but MEW lacks a formal water billing system and customers do not regularly receive water bills. Customers are usually prompted by public announcements to voluntarily report meter readings, once or twice a year, for billing and payment. Over the years, many customers ignored this and ended up with many years of back dues. MEW had limited success collecting back payments, as there is hardly any repercussion for failing to pay water dues. MEW, therefore, has not been able to make many capital investments to expand distribution and improve quality of water delivered. It has been unable to upgrade the pipe network much despite the huge expansion in demand over the years.

Under these conditions, MEW is forced to supply water under less than adequate pressure and flow, which poses two problems. First, households must filter water used for drinking or cooking due to rust and seepage of silt in the old pipelines. This has paved the way for the emergence of a burgeoning water bottling industry in Kuwait, which has not been able to keep up with the demand. Thus, a sizeable share is met by imported bottled water from regional and international suppliers. Second, even if they are on the pipe network, some households must rely on water trucks to augment their water supply, especially during the peak demand season. Consumption of water at the household and business level is characterized by massive waste, given that about 92 percent of the cost of water production is subsidized. Reducing subsidies is critical and several projects look at willingness-topay, as well as perceptions of the subsidy and under what conditions consumers are more or less willing to accept reduction. Nevertheless, there is some differentiation in prices consumers pay by distribution mode. Piped water is cheapest. Trucked water already has some cost, because, while the water is very cheap, delivery is by private water truck companies, and somewhat costly. Bottled water is private brands now, but domestic producers (including some foreign brands produced in Kuwait) pay only the heavily subsidized wholesale prices. At retail, however, consumers pay much more than for tap water or even trucked water. Consumers generally use branded bottled water for drinking, in which case they do pay (but not the full price, because most bottlers buy from the government at subsidy prices). Consumers may use filtered tap water for cooking, and tap water is used for washing and cleaning in the household. They pay far less for this water – very little at all if they are on the pipe system, and mostly for delivery if their water is trucked. Economics research is also needed to understand why scarcity of water does not resonate in Kuwait. Economics, as a discipline, informs us how people ought to make decisions when facing scarcity. However, the term “scarcity” does not seem to be a well-known concept in Kuwaiti households. If we want to tackle the issue of sustainability, we need to understand Kuwaiti perceptions about water and the concept of scarcity. This is a very relevant topic in several economics classes. For example, Intermediate Economics, Environmental and Natural Resource Economics, and Special Topics, all include class projects as part of the course plan, and many student projects are about water issues. The plan can enlist contributions by experts from industry and government to shed light on the issues and to contribute ideas and possibly data. Brief description of current projects Current projects within our research agenda are listed in Table 1. Some of the projects have already been written up in conference form, and we are currently working on upgrades for journal submissions. Some of them are still in the analysis phase, and some are still working on data collection. An early survey (n = 446) aimed to assess willingness to pay (WTP) for tap water among Kuwaiti households under different pricing and subsidy schemes, as well as with or without specific information that Kuwait

potentially faces serious water shortages. Results did show that Kuwaitis are slightly sensitive to water pricing, to the presence of a water subsidy, and to information about water vulnerability and scarcity (Aljamal et al 2015b). However, the effect sizes were quite small, so additional qualitative research was conducted to understand why price – demand relationships are relatively weak (Aljamal et al 2015a). (This is an ‘explanatory sequential mixed methods’ approach, e.g., Creswell 2014.) Table 1: current projects project

purpose

methodology

1. tap water pricing for demand management

investigate willingness to pay (WTP) to estimate price elasticity; assess impact of eliminating subsidy; assess WTP in presence of information about costs & environmental impact assess reasons for lack of much price sensitivity assess attitudes toward subsidy and eliminating / reducing subsidy understand government acquisition and use of technology; off-the-shelf purchase vs. inhouse development and customization determine demand curve / estimate price elasticity assess efficiency of trucking logistics; water demand, water wastage case study: operations of a water trucking company awareness of brands; degree of loyalty to brands; price/value/quality orientation; knowledge of technologies impressions of bottles; preferences & choice criteria for bottles importance of packaging attributes, impact on brand image, brand loyalty marketing (range of class projects, noted in the discussion)

survey

2. tap water pricing for demand management 3. tap water subsidies for demand management technology policy for water production price sensitivity for trucked water distribution logistics for trucked water water trucking company case study 4. brand behavior for bottled water perceptions of package / bottle perceptions of package / bottle several student projects on bottled water student projects on demand / production efficiencies 5. Kuwait’s competitiveness in the GCC

note:

qualitative qualitative qualitative

quantitative qualitative qualitative survey

qualitative survey consulting, which includes qualitative qualitative

economics (several class projects, noted in the discussion) examine reasons behind Kuwait’s lagging secondary data, performance on a range of competitiveness eventually indicators. one key issue is use of oil money qualitative for massive subsidies in Kuwait, while other interviews with GCC countries allocate much more to building government productive capacity to diversify the economy policy makers the 5 numbered projects have been presented at conferences already: 1: Aljamal et al 2015b; 2: Aljamal et al 2015a; 3: Aljamal et al 2015c; 4: Bagnied et al 2015; 5: Speece et al 2015.

The additional qualitative research was carried out by economics student research assistants who had already taken a course on environmental economics. They uncovered two key issues beyond simply the fact that Kuwaitis have high incomes, so that water, at whatever price, is a very small part of household budgets. There is a feeling of entitlement toward subsidies, given government in general is responsible for taking care of citizens, and Kuwait is rich so government can afford it. There is also a strong sense that policies must be ‘fair’ – which means both that it cannot disadvantage less affluent families, and that the level of subsidy must be set so that costs are shared between citizens and government. Follow-on qualitative research explored thinking about water subsidies in even more detail (Aljamal et al 2015c). Generally there is recognition that Kuwait faces water problems. Resistance to reduction in subsidies is not about unwillingness to pay more, but revolves around how the reductions are presented, especially regarding this issue of ‘fairness’. This is about communication to the consumer. Building awareness about the need for water conservation, and gaining acceptance for subsidy reductions is a ‘demarketing’ problem (e.g., Lowe et al 2014, 2015). The issue can be brought into several marketing classes as a marketing communications issue. Tap water is only one delivery method for water in Kuwait. Another delivery is by truck. Sometimes this is because households are not on the pipe system, but often it is because the pipe system is not adequate to meet demand. Much of the system is old, and water pressure is too low to fully supply big apartment complexes well. Then, the apartment complexes and office buildings install large tanks on the ground floor, and pump water to rooftop tanks for distribution by within-building pipes. One project is working with a private trucking company to determine willingnessto-pay under a different price regime than for tap water. While the water itself has roughly the same cost (unless private trucking companies add a mark-up, but this is rare), there are delivery charges. These depend on volume and whether the deliveries are regularly scheduled or urgent because of an unanticipated surge in usage. The company’s pricing strategy also depends partly on its investment strategy – higher quality trucks cost much more, but have a much longer life and are easier to maintain. A related project is looking at the logistics and marketing of this distribution method. This is essentially a business-to-business (B2B) situation, since the water trucking company sells to apartment complexes and office buildings, not to end consumers. A third avenue of research on this stream is developing case studies of the trucking company to use in managerial economics classes and marketing classes. These projects are ongoing, still in the stage of data collection. We also have a project on technology policy for water production, although this is not very far along. For both thermal desalination and reverse osmosis desalination, Kuwait largely uses current technology. However, the thermal technology is somewhat older overall, although there is some effort to upgrade to state-of-the-art, and some research in KISR on adaptation to local conditions. The reverse osmosis technology is much more oriented toward state-of-the-art, and the KISR research, while focused on

application to Kuwait conditions, is much more likely to contribute to development of knowledge at the frontier. Bottled water research has so far been mostly about consumer response, and has largely been from the marketing side. One project was a large-scale survey (n = 1268) carried out by students in the Marketing Principles class. This is a lower-division introductory level class, so students just used the data to get a basic idea about consumer orientations toward quality, value, or price in their brand choices, how much brand loyalty consumers show, and the nature of the brand loyalty (as in, e.g., Speece 1998). However, we also used this data to assess the feasibility of KISR’s brand entering the market (Bagnied et al 2015). Most consumers are not highly price oriented, so KISR can position mid-market, and most consumers are not highly loyal to a single brand and are willing to try new brands. This suggests that KISR can commercialize its bottled water if it does the marketing well. The marketing capstone class turned students loose on how to do this marketing well. One project is examining advertising and sales promotion to develop consumer awareness and knowledge of the KISR brand. Another is examining sales promotion techniques at the point-of-sale. These projects include consideration of whether there is any advantage in consumer perceptions to playing up the new technology, and the fact that Kuwait is playing an active role in developing this technology. Another project looks at the potential for selling the water to organizations – B2B marketing. This includes developing recommendations for how personal selling will need to work in interacting with potential B2B customers. One project is examining realistic prices for the water in the market – what will customers be willing to pay, given the nature of competition in the market. Students on these projects need to interact with each other – KISR cannot engage in substantial discounting, because that will not solve the problem that Kuwait needs to move away from heavy subsidization of water consumption. Additional projects are looking at distribution channels for the KISR brand, and packaging of the bottled water. Both of these also have to be consistent with the image that the brand needs to develop in the market. Two additional projects were carried out to assess packaging issues for bottled water. One was qualitative interviews to understand consumer impressions of the packaging for brands in the market, and their criteria for choosing one brand over the other. This was carried out by a student research assistant who had completed the marketing research course earlier (and thus, had experience with an applied mixedmethods research project). The second was a large survey on packaging attributes and how they contribute to brand choice, carried out again by another Marketing Principles class. The qualitative project was used to help construct the questionnaire in the survey, but otherwise, most of the data is still being analyzed, except for students in the Marketing Principles class doing basic descriptive statistics to see a few points on consumer behavior in Kuwait. The economics student projects are conceptual in nature and are designed to highlight the extent of the external economy of water production. The focus is on up-to-

date research that can be utilized in properly identifying all potential aspects of the external economy. This will possibly lay the foundation for further qualitative research to develop an exhaustive list of stakeholders in the external economy. Eventually it will move to quantitative research to assess external cost and subsequently the social cost of water production. We also note one additional project that falls within the framework of Figure 1. It is not specifically about water, but rather, addresses macro-economic issues. We are examining Kuwait’s performance relative to other GCC countries on the range of competitiveness indicators in the Global Competitiveness Report (WEF 2015). Kuwait is fairly competitive by world standards (ranked 32 worldwide), but is falling behind its GCC counterparts. Kuwait ranked last among GCC countries on 10 out of 12 macrolevel indicators, and has been declining on nearly all of them, compared to gains on nearly all by the other five GCC countries (Speece et al 2015). One key reason for this seems to be substantial over-reliance on oil revenues to build a welfare state and provide high living standards (i.e., heavy subsidization, including water). Other GCC states have implemented policies to diversify their economies, and much oil revenue has gone into strategies and projects which foster productive capacity and productivity. Kuwait has not done much to diversify its economy or to encourage the development of a productive private sector. Such policies are under debate, which is why this is an opportune time for a research agenda such as ours that looks at these issues. So far, this project has mostly used secondary data available in the Global Competitiveness Report (WEF 2015), but a few in-depth interviews have begun to explore the issues behind each macro-level indicator with government policy-makers. Eventually a full set of qualitative interviews will be carried out with government officials and policy makers. The interviews regarding tap water noted above included a little bit of discussion with policy makers, and the water issues there are clearly a subset of these broader policy issues. Conclusion Kuwait seems to be showing signs of moving toward limited partnership with the private sector in energy and possibly water production. Kuwait may, therefore, consider paving the way for development of real, mostly unsubsidized water markets. If that is inevitable, substantial problems remain to be solved in production, distribution, and demand management. One key problem is the institutions which govern the entire process; Kuwait’s system is not well oriented toward a functioning market mechanism to reduce water consumption, especially in the tap water part of consumption. It could be changed, provided policy changes are introduced carefully. Good management of communications can gain acceptance of reduced subsidies, but poorly implemented policy changes will generate strong resistance. Our research agenda is generating data and ideas that are useful as Kuwait strives to solve pressing water problems and develop a sustainable water supply. The agenda also engages students and provides opportunities for engagement and possibly collaborations with practitioners in the public as well as the private sectors.

This helps build a cadre of students who will understand the issues and appreciate the intricate role of the market system in promoting viable water policy for Kuwait. Some of these students may play a role in setting water policy for government or companies, and certainly most of them will participate in shaping public opinion on the issues. Some students may go into public sector or private management involving water, so the agenda also builds managers with the analytical and managerial expertise to handle implementation of policy. This work has already generated many conference papers, and will eventually result in some good journal articles, so all of this applied work to involve students and external stakeholders generates material which is useful for accreditation purposes. Finally, and not necessarily least, our research agenda is generating data and case studies which can be used in classes. This is very important in our environment where there is little data and few case studies oriented toward local conditions. Students are more interested, and understand concepts better, when they can see that the textbook material does actually relate to things in Kuwait which they may have to deal with when they graduate and develop their careers.

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