Finally, Kuwait en route to borrowing money: Is this plan B?

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IN search for $20 billion, we are now hitting the last available resort for borrowing money – from international institutions and financial houses.

The question to ask is – Will this be the last option, or will Kuwait be using the same route for years to come? We shouldn’t be surprised by this move as it was not just because of the low oil prices but mainly due to misuse of annual budgets on wasteful expenses that didn’t add any value to our country or for development of the local well-being of our Kuwait.

We were so blinded by the oil revenues that we didn’t think seriously about limiting our expenses or looking for alternatives or even thinking about plan B. Asking for $20 billion is the beginning of more borrowings to come especially since the current price fir Kuwaiti crude oil is around $15-$16 per barrel. The oil prices are not expected to go beyond $35-$40 a barrel this year.

However, our budget is based on a price of $55 a barrel, and to balance it, Kuwait needs $85 and more due to the current coronavirus crisis. Unfortunately, our expenses are increasing by the day without any checks and balances. Of course, there are other alternatives.

Under today’s circumstances with the low prices of shares that have fallen by 30 percent to 40 percent of their value, and the interest rate being less than two percent, the choice is easy to make. We are now heading on the same channel towards borrowing like most of the oil producing countries. Has the time come for some serious thinking and having a plan B or at least searching for it? Time has come to start from a clean page.

Can we seriously address the issue of restructuring and the need to deal with of more than one million marginal workers and their sponsors who are responsible for cheating them, leaving them jobless and without pay and a place to go, and making them burdens for the state? Can we think of alternatives to oil, something that we have been urging for more than ten years and our planning board have been asking and requesting for since 1965? We had been calling for the privatization of some of oil sectors to provide the necessary cash flow but our calls fell on deaf ears while our neighboring countries picked up on this and ran with it.

Coronavirus is making us to think and administer our country with better efficiency and higher rate of productivity in every field. We are staying home and maintaining social distancing, and our school children are going virtual; this is more than what our government is asking for. This shows the solidarity of everyone living on this land.

Oil prices will remain weak for years to come. Looking for plan B is a must. We just need to open our old drawers and search for the economical outlook of Tony Blair and others in order to find the plan B that is still there.

PS – Please let us keep our promise and commit to staying at home. We did and should continue to do so, as the end is near and there are just few weeks left. We need to stay put, as our brothers and sisters are coming from abroad who should commit to staying home and adhering to our government’s guidelines. Surely it would not be long before we are able to start visiting each other. Together we can overcome our crisis. Thank you all.

By Kamel Al-Harami Independent Oil Analyst
email: [email protected]

This news has been read 6872 times!