Our current economic situation is perfectly captured by the popular Arabic proverb: “Neither the wolf dies, nor the sheep perishes.” This saying aptly illustrates how two opposing sides can coexist, with each achieving its objectives without causing the destruction of the other. Instead of supporting tenants of state-owned properties, the Cabinet, particularly the Ministries of Finance and Commerce, and Industry, has taken a counterproductive approach.
Rents have been raised, and stricter regulations enforced, especially in prominent commercial areas such as Mubarakiya, Sharq, and The Avenues. This decision is counterproductive, as these markets play a vital role in driving local economic growth and boosting consumer spending. The resulting drop in consumer activity has negatively impacted overall commercial performance. Higher government-imposed rents in these areas are forcing investors to close their businesses, as they are unable to absorb the increased costs.
Consequently, this leads to higher prices for consumers, placing additional pressure on household budgets and reducing purchasing power. If this trend continues, shop owners will face the costly choice of either shifting their business focus or closing down entirely, which would further deepen the economic decline and reduce overall spending. In light of these harmful measures against investors, critical questions arise: Is there an actual plan in place among those responsible to revive the economy? Is it still possible to reverse the damage that has already occurred? Other countries tackle these challenges differently, often offering incentives to investors, such as maintaining stable rents for public properties.
The primary objective should not be limited to collecting fees and taxes but should focus on sustaining a vibrant commercial environment. Such dynamic economic activity helps stimulate all sectors, including construction, manufacturing, agriculture, and services. The state ultimately benefits from this approach, as it prioritizes a healthy, uninterrupted financial cycle while simultaneously boosting the gross domestic product. In these countries, the right to use state-owned properties is granted for periods ranging from 49 years to 99 years, with options for renewal. To protect public purchasing power, the associated fees remain stable. Furthermore, these nations implement annual salary increases in line with the inflation rate.
This strategy aims to stimulate consumer spending and incentivize investors to take out bank loans, which are offered at lower interest rates. Central banks in these countries also adopt a more flexible approach to loan collection requirements for financial institutions, especially when the collateral provided significantly exceeds the loan principal, often by two or three times.
In addition, their governments lower interest rates to reduce borrowing costs and stimulate employment. In contrast, the recent increase in public property rents in Kuwait’s markets triggered a negative chain reaction - shop closures and rising consumer prices as businesses struggled to cover higher costs. This situation proved harmful, providing no real benefit to the state, citizens, or investors. Clearly, no one objects to the government collecting fees and taxes, but only when they are set at reasonable and rational levels.
However, since economic activity is the foundation of sustainability, and the government ultimately benefits from it, fees must not undermine or weaken that activity. This requires a careful review of the decisions that led to the current situation and the decline in public spending. In many countries, the first step in supporting small, medium, and emerging businesses is to provide them with accessible loans and tax incentives, enabling them to grow and preventing their absorption by large corporations.
The objective is to create a balanced environment in which the government encourages growth and profitability while refraining from actions that compete with or undermine citizens’ livelihoods. Governments often support low-income citizens by providing unsecured loans. When borrowers are unable to repay, the government typically intervenes by writing off the defaulted loans or extending repayment periods, depending on the borrower’s financial capacity.
