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End subsidies

A THIRD of Kuwait’s budget goes to salaries and subsidies. This means the State spends about KD 16 billion without any return, while it spends about 17 percent on development projects. Doesn’t this mean the country is pushing itself into the abyss of budget deficit? Until when will the country spend this way, considering the incessant growth of the population and the rising cost of living?

Is it not strange that the cost of subsidized items and services increased remarkably from KD 300 million in 2001 to KD 6 billion in 2013? Is it not an indication that we are heading towards a catastrophe on our own because we allowed the snowball to grow big quickly? In fact, it is a fireball which ravishes the income of the middle-class and those with limited income. It had also increased the financial burdens of the State which may face a major financial crisis in the coming years, up to the point of not being able to pay the salaries of employees.

The only solution to this problem is to remove subsidies on commodities and services. This necessitates stopping the generosity which is experienced only in Kuwait, not in any other country. There should be balance between expenditure and levy; especially in terms of water, electricity, fuel and diesel subsidies. This step is important since most of those benefiting from subsidies own palaces, towers, residential complexes, luxury cars; in addition to the smugglers.

Until when will Kuwait continue to be the cave of ‘Ali Baba’ for all those pushing for approval of the proposal to increase salaries? Greedy traders want to earn more profits by increasing the prices of goods, most of which are subsidized. This is in addition to the soaring rental fees, considering the State also grants rent allowance to its citizens.

If the government really wants the state of luxury to continue, it must remove subsidies. It should stop talking about its inability to respond to people’s demands due to the high cost, as it continues to waste huge amounts of money without any returns. 

For example, the State can save billons of dinars from electricity as the actual cost is 38 fils per kilowatt but only two fils are collected from consumers. Under such circumstances, the State itself is teaching the people to waste funds or resources. If it charges the consumers based on the actual cost, there will be no wastage. The same applies to water, fuel and foodstuff; taking into consideration that greedy traders sell subsidized food items in the ‘black market’ or outside the country.

Once the subsidies are removed, or in other words, when the country saves six billion wasted dinars in this manner, the government will be able to continue granting children allowance or even write-off citizens’ debts and still have enough savings. At the same time, the state of luxury will continue while ending the squandering of public funds; otherwise, the wealth of the next generation will be depleted.

By Ahmed Al-Jarallah
Editor-in-Chief, the Arab Times


By: Ahmed Al-Jarallah

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