In major crises, especially wars, governments act to enhance national economic sustainability through plans that differ from those adopted during periods of pre-war prosperity. Taxes and fees are reduced, and investors are allowed to operate more freely, without restrictive regulations. In times of war, governments may instruct banks not to pursue borrowers and may lower interest rates to stimulate a more active financial cycle. These measures enhance stability, reduce social tension, support the continuity of financial flows, and help control the rise in commodity prices, especially domestic manufactured products.
The wartime economy is fundamentally different, due to which the primary focus of governments becomes mitigating problems so that the government is not preoccupied with anything other than the war. For years, the region has suffered from instability. Kuwait has experienced several crises, each of which has placed pressure on local investment and exacerbated the challenges faced by business owners. These have led to several consequences that have gradually begun to emerge, further intensified by decisions that discourage local investment.
One of the most significant of these measures is the restriction on investors disposing of their usufruct rights in industrial plots and agricultural holdings, while banks insist on obligating borrowers to repay loans despite the difficult circumstances facing the region and Kuwait. We must acknowledge that Kuwait has suffered greatly since the Iraqi invasion as a result of that exceptional situation, especially since the invaders destroyed much infrastructure and paralyzed commercial activity.
Despite its recovery, Kuwait continues to struggle. The COVID-19 pandemic added further burdens, the effects of which are still felt today. The internal political situation from 1992 until December 20, 2023, influenced the direction of investment priorities that had previously been focused on strengthening the local economy, particularly in the period following the 2003 liberation of Iraq from Saddam Hussein’s regime. The current war represents a new setback that has negatively impacted the internal situation, resulting in stagnation in the local economy.
One of the reasons behind this stagnation is laws that do not support companies and investors, especially as the government has not implemented protective measures to mitigate the effects of the war, which are likely to last for several years. This may lead to further pressure on the investment climate and the economy in general. Therefore, the Cabinet has responsibilities towards its citizens, foremost among them being to alleviate their burdens by enacting laws that help maintain a strong economy.
During crises, governments work to ease pressure on individuals and businesses and avoid procedures that may reduce production by imposing financial obligations, while businesses require support to sustain commercial activity. Former US Secretary of Defense George Marshall said, “When you hear the roar of cannons, you must start planning for reconstruction and revitalizing the economy.”
By the way, he was the architect of the European Recovery Program, which bears his name and helped Europe recover after World War II. Undoubtedly, the recovery process requires easing the burden on borrowers, who represent the majority of citizens and form the backbone of the national economy through the circulation of capital, which ultimately benefits the country as a whole. Therefore, when the government asks people to make sacrifices, it must also make sacrifices during difficult times to ensure a strong economy in times of prosperity.
