Government program ‘to transform Kuwait, raise living standards’
The government has published its program for the second session of the current parliament, which addresses economic and social issues profoundly. The aim is to tackle low international indicators and raise living standards for locals and residents in Kuwait while transforming the economy into a world economy driven by production and local human resources
In the current government program, there is a noticeable return to the vision of “New Kuwait 2035”, retracting from the previous revision of “New Kuwait 2045”. The explicit goal is to transform Kuwait into a commercial and trading hub that attracts foreign investments, raising productivity within a supportive institutional organization, human development, reengraving social values and encouraging a business environment.
The program will focus on the transformation from a rentier economy to a productive economy, a formula for economic development proven by international experience. It emphasizes achieving balance in the structure of the national economy to support the long-term sustainability of economic and social welfare. However, there is an imbalance between the growth of crude oil prices and local production, which could cause a deficit of KD 45-60 billion within the next five years.
The program highlights the potential consequences if financial and economic conditions continue to deteriorate, including the erosion of individuals, companies, banks and institutions, a dangerous level of unemployment rates, the collapse of social services and a deterioration of social security alongside major inflation in the cost of living.
Comparing international averages with Kuwait in economic indicators, the program notes that “57 percent of total government expenditure is for wages”. Kuwait spends three times as much as the average of the OECD, and total government expenditure is 25 percent higher than OECD averages. The program clarifies that government employment consists of 23 percent of the total manpower in Kuwait, which is higher than the average of OECD. Meanwhile, direct foreign investments consist of 0.2 percent of GDP, which is 12 times lower than OECD averages and nine times lower than Middle East and North Africa averages.
Continuing with current policies, the program explains that government funding requirements are expected to double over the next 10 years. Financing government spending will require high oil prices, and the local economy will not develop into an economy that focuses on innovation and entrepreneurship. Kuwaitis are expected to increase in the public sector instead of the private sector, and residents’ welfare will deteriorate despite increased government spending.
The program also diagnoses the main challenges facing the execution of projects into six categories and 48 specified issues. The categories include human resources, work environment, measuring work policy indicators, technology, project planning and financial expenditures. The first step, according to the program, is activating article 20 of the constitution by expanding investment opportunities, allowing the private sector to create national job opportunities in different economic sectors. This is the main goal of the government program.
The program states that its principles stand on fairness, security and development, transforming citizen ambitions not only to consume products but also to produce them. Criteria for choosing initiatives and projects include eliminating current negative practices, initiating standing and new projects within 100 days, and moving forward with initiatives that reflect positively on global indicators. The program allocates 42.48 percent of projects for development, 26.30 for investment opportunities and 32.36 for infrastructure.
Initiatives and projects that the government aims to activate within 100 days include studying railroad connections between Kuwait and Saudi Arabia, constructing three research centers, developing health facilities and organizations, as well as repricing public and real estate services, among others. The program heavily emphasizes that within the second parliamentary session, important legislation includes the development of the northern economic zone, the transition to green energy, organizing media, improving the social services system, enhancing electronic documentation, raising wages and fostering private and public cooperation.