It has been a long time since Kuwaitis accustomed themselves to the spoils of the oil economy. However, it seems that the party is coming to a close. Are we ready for that? As a witness of events in the country for a long time I do not foresee any real change in our cultural value system. If we fail to understand the needed change in our social behavior no major economic and fiscal policies will be amended. It is true that the drop in oil prices since 2014 and consequently the decrease of the treasury revenues led to attempts to rationalize fiscal policies and perhaps resulted in an economic slowdown, however, one can say that the political mentality still hopes a rebound of oil prices. Thinking about economic reforms happens, only, when oil revenues become less than the expected expenditures. This can tell that reforms are not considered as a strategy but rather a temporary measure to adapt to the circumstances. The political society is mainly populist.
The theme advanced by some concerned citizens of diversifying the economic base is worth pondering. One may ask how we can diversify when the country has limited comparative advantages. True, the government established a sovereign fund which is invested in high quality instruments but the main challenge is the diversification of the local economy. As we know that the sovereign fund is invested in advanced developed countries. It will not be easy. We can enhance the role of the private sector through a serious privatization scheme. It is also important to put more effort on human development.
Human development means improving the quality of education and introducing a plan to emphasize vocational education and seduce Kuwaiti young people to enlist in its programs. According to official statistics we have many college graduates that are not needed by the government and the private sector while we still need many trained Kuwaitis in many vocations. There should a rehabilitation of the educational system in order to address the real needs of the labor market. If we endeavor with such actions we can move to the possibility of a knowledge economy. Our human resources should be our source of income in the future. Many countries depend on their educated and trained people rather than natural resources in creating the wealth of their nations.
Kuwait must realize that change of political philosophy and modernizing social norms and behaviors will enhance positive changes. If we cling to what we have been accustomed to in the last seventy years we will not be able to sustain our standard of living and allow our young people to enjoy a decent life in the coming decades.
By Amer Theyab Altameemi
Consultant and Economic Researcher