Future looks ‘bleak’ if situation continues for long time
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Salaries, benefits consumes 75 % of budget
KUWAIT CITY, March 30: Former member of the Supreme Petroleum Council, former president of the Association of Accountants and Auditors, former president of the Union of Arab Accountants and Auditors, Mohamed Hamoud Al- Hajri, described the period in which the world lives today in light of the corona virus and low oil prices, is like a war situation in every sense of the word, against an invisible enemy that cannot be predicted, its strength, and its spread, pointing out that everyone should bear its consequences.
Al-Hajri told the Al-Rai daily if this situation continues for another three to six months, the government has no choice but to stop the payment of salaries temporarily and to compensate the citizens with a subsistence allowance only, that is sufficient to meet the basic needs, the most important of which is food and drink, in light of the interruption of work and economic life in Kuwait.
Al-Hajri says the next stage is harsh and everyone should bear its consequences and responsibilities as a citizen as long as the state provides the basic requirements for citizens while they are at home, which is the best way to confront the threat of the spread of the virus. He went on to say, “In short it is time for us to give something back for the homeland and serve it will all our capabilities available to the individual.”
Al-Hajri stressed that this will be a temporary measure to support the state budget taking into account those who are at the head of their work and at the frontline to confront the virus because their status is exceptional. He stated this is necessary, especially with the oil prices reaching $25 a barrel, on the one hand, and the costs of facing the epidemic, on the other hand, and the size of the expected budget deficit.
On the other hand, sources warned that the salaries and benefits section of the state consumes about 75 percent of the budget, including more than half a billion dinars to support employment in the private sector, indicating that the state is on the verge of a large budget deficit and will have to finance it by borrowing from international banks. It is the best solution, or by monetizing assets which is difficult at the present time, and will cause losses.
The sources emphasized that the oil prices returned to what they were in the 2008 crisis, but the difference lies in the fact that the previous crisis was economic. For its part, the oil sources have warned that companies and contractors working with the oil sector are close to taking strict measures towards their workers, because there are not enough projects to enable them to employ this large number of workers.
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