KUWAIT CITY, Nov 12, (AFP): Candidates in Kuwait’s parliamentary elections have focused their campaigns on unpopular government austerity measures as the oil-dependent Gulf country faces financial stress due to low crude prices.
Kuwait, which sits on around seven percent of the world’s proven crude reserves, has resorted to a series of measures to cut spending and boost non-oil revenues in a bid to diversify its economy. But measures including raising power and water charges and hiking petrol prices have triggered a political crisis, leading to the Parliament being dissolved last month and snap polls being called for November 26.
“The government has tried to resolve the economic crisis by raising funds from citizens, like hiking petrol prices,” independent candidate Hisham al-Baghli charged at an election rally this week. “This policy will result in serious consequences for ordinary citizens,” warned Baghli, a former lawmaker. Before crude prices began to slide in mid-2014, Kuwait generated around 95 percent of its income from oil. But the country’s oil revenues dropped from a massive $97 billion in the fiscal year 2013/2014 to just $40 billion last fiscal year, which ended on March 31, according to finance ministry figures. And oil income is projected to slide further to around $35 billion this fiscal year.
In 2015/2016, the OPEC state posted its first budget deficit of $15 billion after 16 years of surpluses. The government – which had increased its expenditures to record levels between 2006 and 2015, mainly on wages and subsidies – cut its spending by around 15 percent after oil prices dropped by 60 percent.
It has lifted subsidies on diesel and kerosene, hiked petrol prices by 40 to 80 percent and decided to raise power charges from next year. The measures have triggered fiery reactions from parliamentary candidates seeking to drum up public support. “Undermining the income of citizens through government measures is a red line … and will be firmly confronted by the next parliament,” said Askar al-Enezi, a former lawmaker who hopes to be reelected.