Need to ‘restructure’ state public finances; ‘Enforce privatization’

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KUWAIT CITY, May 1: A recent government study concluded the need to restructure the state’s public finances by implementing the privatization project as soon as possible, to stop the deterioration of public finances, raise macroeconomic performance, raise the level of education and the quality of health services, and generate real development companies that cement the citizen’s confidence in the government and contribute to enhancing revenues, reports Al- Qabas daily.

The study indicated after implementing a tangible part of the privatization projects and to achieve financial sustainability, the general budget foundations will be modified as follows — setting an upper limit for the budget deficit not to exceed 5% of total expenditures; the surplus of revenues, if any, shall be distributed 20% for the Future Generations Fund; 40% to the General Reserve Fund; 40% to be distributed equally to citizens aged 21 years and over. If the deficit exceeds the specified percentage, the state’s share in the areas of support (health insurance, education premiums) will be reduced to ensure that the deficit is reduced to the specified percentage. The use of foreign labor will also be reduced to the lowest possible limits, in order to achieve a balance in the demographic structure.

Study
The study indicated that the previous development recommendations did not find their way to implementation due to the successive changes that occurred in the formation of the Council of Ministers, while the government’s development efforts were limited to major construction projects that did not achieve the required development goals, but rather increased operating costs and budget burdens and burdened the government and with it the areas of corruption flourished, the budget deficit grew and with it the need to resort to external borrowing.

The study stressed the need to immediately start implementing the general privatization program and to form a preparation team that would emit executive proposals for amending the privatization law and a general plan from which detailed plans for each sector would branch out. The public privatization project aims to diversifying sources of income and reduce dependence on oil, raise the level of production and performance in public services, especially education and health, provide attractive investment opportunities for citizens to reduce capital migration through the establishment of strong national companies capable of growth at local and regional level, achieve more justice in distributing the economy’s output among citizens, reducing the current burdens on the government apparatus in a way that improves its capabilities to carry out its sovereign duties, reduce the points of political tension between the government and the Parliament and provide productive and real job opportunities for citizens, and restricting the import of foreign labor to a minimum.

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