The project aims to establish an integrated free zone, new operating rules that avoid bureaucracy and hopes to rely on attracting talent, the committee of the Council of Ministers on the development of the islands study showed.
The project, which includes the islands of Boubyan, Warbah, Failaka, Maskan and Aouha, includes tourist and leisure areas with Venetian-like waterways in Italy, shopping centres, a world-class travel centre and treatment centres.
It will house some 400,000 people and will take a period of 20 years to complete.
The project is capable of attracting large international investments and enhancing the national product of the country, especially as these islands fall within the Silk Road Project, which extends from China to Europe and Africa.
"The development of these islands has come to a number of considerations, including its unique location within a region where economic turnover is estimated at $2.2 trillion annually," said Hanan Ashkani, a member of the general planning committee of the project.
China is also exploring ways to benefit from the islands and their economic feasibility.Ibrahim al-Mishal, an economist, said that direct foreign investment in Kuwait is expected to double as a result the project, noting the GDP per capita in the region will be three times higher than the rest of Kuwait.
Kuwait has continued to inject billions of dollars into vital projects in an effort to stimulate growth and diversify the economy, especially after the global oil price slump and its impact on the Gulf state economy.
A report issued by the ministry of works revealed measures to launch about 24 projects over the next two years, estimated at about $13 billion.
According to data released by the ministry of finance earlier this October, Kuwait's fiscal deficit declined significantly during the first five months of the current fiscal year, which began on 1 April, in an indicator of the possibility of achieving a surplus after the state followed procedures which will enhance revenue and rationalise spending.
The announcement came just days after Saudi Arabia revealed plans to build a futuristic city
in the region.
Crown Prince Mohammed bin Salman on Tuesday announced the $500 billion project, dubbed NEOM, which he billed as a hub for technological innovation.
A map published
on the project's website shows that the new zone will include the Red Sea islands of Tiran and Sanafir, which Egypt controversially handed over to Riyadh.