‘Social contract inherits failed govt sector, distorted system of incentives’
KIA needs to follow new policy to pump money into Kuwait: sources
KUWAIT CITY, June 27: A recent World Bank report revealed structural defects hampering fiscal and economic reforms, and hinted the current social contract is no longer in fashion with the distribution of wealth and should be changed, reports Al-Qabas daily.
The report indicated social contract inherited a failed government sector, distorted system of incentives, avaricious economic diversification, and low-level academic products. It reaffirmed the policy of wealth distribution is negative and counterproductive to the quality of general services and that social contract is built on employing vast majority of citizens in the public sector, amid enormous subsidy for electricity, water and other services.
It stated the phenomenon has negative consequences on private sector in a way that its growth is retarded contrary to the wide and extremely weak public sector.
Meanwhile, Kuwait Investment Authority (KIA) invests only 27 percent of its capital in the country, reports Al Shahed daily quoting parliamentary sources.
Sources pointed out the authority has to review the projects it executes and follow a new policy to pump money into Kuwait in order to revive the local market and to develop the educational, health and employment fields. They claimed there are defects and shortfalls in the works of the authority as seen in its balance sheet for 2016/2017 which reported revenues of only KD120,000 while the expenses reached KD60 million. They asserted this manifests a deep problem within the authority especially since most of these monies are spent outside without any benefit for the citizens.
They disclosed two MPs will propose establishment of a body named ‘Public Authority for Evaluating Billion Investments’ which specializes in balance sheets wherein billions are involved. They asserted KIA must focus more on following up and coordinating with financial regulatory systems like the State Audit Bureau.
HH the Prime Minister Sheikh Jaber Al-Mubarak Al-Sabah chairs the weekly Cabinet meeting.