The persistent need to boost GDP and diversify income sources is a pressing concern. In tackling this, the government should not hesitate to learn from other nations, especially those with similar economic, cultural, and social characteristics to Kuwait. Valuable lessons can also be drawn from countries that, despite starting with comparable economies in the past, managed to surpass even strong long-established economic powers. It was a success achieved through deliberate strategy rather than a miracle.
Therefore, acknowledging the many ways to increase national output is far from revolutionary. What is crucial is that decisionmakers understand that relying on short-term, improvised solutions will inevitably produce long-term negative consequences, affecting both the country and future generations. Any immediate benefits from such measures are merely temporary palliatives for a chronic, underlying illness. In times of crisis, countries have responded in different ways.
Some manage to transform challenges into opportunities for growth, while others cling to conventional approaches that often lead to significant deficits. A successful approach avoids unnecessarily restricting citizens’ lives or imposing excessive burdens on businesses such as factories, farms, restaurants, and entertainment venues, unlike what is commonly seen today. Instead, it implemented smart incentive driven regulations that attract investment and stimulate activity in a variety of sectors. Kuwait, in particular, possesses vast untapped resources and numerous underutilized opportunities.
If properly harnessed, these assets could substantially boost national output, diversify the economic base for the benefit of present and future generations, and position the country as a strong regional competitor. For instance, the Social Security Fund, which holds substantial assets of KD 45 billion as noted in a previous editorial, should reconsider its strategy. Rather than engaging in high-risk ventures, such as those that caused losses during the Lebanese financial crisis, these funds could be redirected toward national development. Specifically, they could finance the construction of residential cities, support vital infrastructure projects, and invest in productive development initiatives. Another major area for fiscal reform is subsidies. At present, they cost the public treasury over seven billion dinars annually.
Rationalizing or abolishing these subsidies and limiting support to low-income groups would reduce the cost to around KD 1 billion, generating savings of approximately KD 6 billion that could be redirected toward development projects, thereby eliminating the accumulated annual budget deficit. Similarly, allocating a portion of the sovereign wealth fund to domestic investment warrants consideration. The fund’s assets exceed USD 1.2 trillion, and global trends indicate that external investments carry significant risks. A more balanced approach would be to invest one-third of these funds locally, supported by both domestic and international expertise to ensure effective management. The state continues to incur substantial annual costs, amounting to millions of dinars, to manage accumulated, uncollectible debts linked to the “Al-Munakh market” reservations, which are recorded each year in the budget as nonrecoverable amounts.
Although these debts are uncollectible, a designated entity continues to be responsible for administering these holdings. In many cases, the original reservation holders have passed away, the properties are deteriorated, and the land remains unused. A practical solution would be for the state to liquidate these holdings and offer them to investors under favorable conditions, thereby generating significant financial liquidity. A sound state strategy must prioritize long-term continuity, development, and wealth creation, rather than short-term, immediate gains. This forward-looking approach explains why governments worldwide have started actively seeking new economic opportunities following developments related to the Russia– Ukraine conflict and Middle East settlements. Gulf states, in particular, have adopted future-oriented strategies aimed at mitigating potential losses should oil prices fall below fifty dollars.
As the executive authority, the Cabinet must take responsibility for addressing this issue. It has the ability to formulate a practical and well-considered plan that genuinely benefits the national economy, rather than relying primarily on taxation as a solution. Excessive taxes and fees only exacerbate inflation, trigger social discontent, and further constrict economic activity. This raises an important question – Have the ministers taken into consideration Ibn Khaldun’s historic warnings about the consequences of arbitrary and poorly designed taxation? Imposing random fees on businesses and industrial sector is not the answer. A more effective approach lies in attracting highly skilled professionals from countries suffering from high inflation, while implementing a fair and thoughtful tax system. Failure to adopt such a strategy risks accelerating outward migration, as individuals and businesses seek more favorable economic, industrial, and lifestyle opportunities in other countries.
