THE headline “Our Country is in Danger!” was published on the front pages of all the Kuwaiti newspapers. It was the headline of a report released by the Kuwait Chamber of Commerce and Industry last Wednesday, highlighting the need for urgent economic reforms based on three clear objectives – giving a stronger role to the private sector and realizing this sector’s importance in the forthcoming economic reforms and allowing it to fulfill its role, ensuring protection of Kuwait’s sovereign wealth funds, and lastly demographic restructuring by reducing expatriate workforce.
Following the new elections and with the new parliament, the number of articles and opinions regarding Kuwait’s economy has been increasing including in the British The Economist, which may be sponsored by the government. Nevertheless, all are calling for greater reforms, and it is time to do something out of the box.
The call is for giving priority to impose some form of taxation including value adding tax, but not on those with limited income particularly the government employees.
The document issued by the Kuwait Chamber of Commerce and Industry is more elaborate and detailed, extending into every sector, such as the need to reform education and health sectors, distribute lands that are mostly 90 percent owned by the government, and controlling most of the economic activities, postal sector, airport and ports by the private sector.
It called for freeing part of the oil activities, excluding upstream in oil and gas in terms of ownerships, but including refining, distribution, transportation, aviation, downstream and overseas exploration, in line with the rest of our neighboring countries and the region.
Certainly, the document issued by the Kuwait Chamber of Commerce and Industry is a positive step that also addressed our democracy and stressed the need to work within the parliament, as well as to work in collaboration and with the cooperation of all, with greater emphasis, clarity and transparency.
Everyone is calling for economic reforms internally and internationally. However, does our government have its own vision on how to progress? Perhaps not, if it is still overwhelmed with the availability of $600 billion in our sovereign wealth funds. Or maybe it is comforting itself with The Economist’s report on Kuwait as per which oil prices in 2021-2025 will be in the level of $51 per barrel. However, a barrel price of $81 is needed to balance the budget and to cut its budget figures, something that it is neither anticipated nor expected.
Our country is in need of economic reforms with a long term vision, objectives, determination, and working hand-in-hand with the parliament in frank and open sessions and with the participation of all. There should be emphasis on finding alternative sources of income besides oil so that it is no longer the main source of income, without cutting down on the expenses, ensuring the introduction of value-added tax, and privatizing government-controlled departments.
For years, many outside former leaders and experts, as well as local economists have been writing about economic reforms in Kuwait and advising our various governments in that regard during open meetings and discussions on how to improve and rectify our situations. Alas, all were either kept at the bottom of government’s drawers or given deaf ears.
We are in need of a leader who can lead and implement economic reforms in Kuwait before the time comes when we run out of cash and sell all of our assets globally after two decades. Our country is on a dangerous path.