Thursday , October 19 2017

Increase in fuel prices forecloses need for loan

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

IT IS impossible for any country, especially a country like Kuwait, to make profit if it continues to subsidize majority of goods and services in a difficult economic situation and oil prices are extremely low, considering this is the foundation of the economy.

Under such circumstances, the fiscal reserve will be depleted and the country will be enmeshed in external debt which has negative implication on the economy and the services offered to the public. It is true that some decisions seem tough, but they serve the long-term interests of the society.

This is applicable to the increase in prices of fuel, including petrol, or imposing taxes which are necessary in the future regardless of the price of a barrel of oil. The reason behind this is that it helps diversify the sources of income and reduces the unbearable wastage at various levels.

This is true especially after some laws have become burdens on the State budget without any tangible benefit. Lawmakers in the previous parliaments enacted those laws for electioneering purposes, but the citizens did not notice the negative implications until later.

An example of this is the reactivation of the Mortgage Law which was instrumental in the recession of a vital sector.

All those laws led to shackling of the national economy which would have been avoidable if not for the shocking decline of global oil prices and its direct effect on Kuwait and other oilproducing countries. The government decided to raise the prices of fuel but it is unfortunate that the reactions against the decision lack objective bases.

The matter is presented as a string which will be used to hang the citizens. The statements of former and present MPs, as well as that of the movements, saying the country is about to face starvation or bankruptcy, which we never heard about, are just rumors to deceive the people. Actually, they are trading in the feelings of citizens, instead of finding solutions to the crises.

Those who oppose the decision have neglected the fact that it was not taken accidentally by a single employee in one of the ministries or even a single minister. In fact, the decision came out after conducting extensive studies in coordination with international commercial organizations, including the World Bank.

The decision is aimed at preventing bad economic consequences in case of failure to handle the current crises. It is true that the Kuwaiti Constitution guarantees freedom of expressing opinion according to the law. Nevertheless, my worst fear is that the government might not be able to protect its decision and become submissive, like its predecessors, to parliamentary pressures which target the people’s votes.

In the end, the crisis is prolonged while the suffering of citizens is intensified. It is said that a country indebted to foreign countries loses control over its decisions.

If the Kuwaitis want their country to remain independent and able to ensure a bright future for the people, they should accept the decision to lift subsidies. They should also agree on imposing taxes for the upkeep of their country and to guarantee the continuation of reasonable prosperity

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

Email: ahmed@aljarallah.com

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