29 Scholars from Kuwait University sound the alarm over Kuwait’s Economic Future …Before It’s Too Late
The paper proposes alternative scopes of analysis for the existing economic imbalances in Kuwait and offers solutions for future economic reforms that enable development and safeguards the welfare status of Kuwait and its future generations..
Kuwait, 29 November 2020: KuwaitImpakt.com published today a new paper authored by 29 distinguished Kuwait University scholars titled “Before It’s Too Late: A Vision to Reform the Kuwaiti Economy”. The paper proposes alternative scopes of analysis for the existing economic imbalances in Kuwait and offers solutions for future economic reforms that enable development and safeguards the welfare status of Kuwait and its future generations.
The paper carefully investigates the foundations that led to the current instability and imbalance of the Kuwaiti economy. It identifies the dependency on oil, the fiscal imbalance, a weak educational system, and the inflated public sector as key factors. How the paper differs from the prevailing discourse is that, rather than examining the economy as a disconnected entity, it focuses on the symptoms and impact of these imbalances in all aspects of the socio-economic landscape.
The authors outline five structural imbalances in the Kuwaiti economy that were deepened by accumulating crises, including:
- Heavy Dependence on Oil Revenues accounts for 91% of Kuwait’s exports
- Public Finance Imbalance exemplified by the accumulated budget deficits since 2015 amounting to KWD 28 billion
- Labor Market Imbalance caused by a bloated public sector, and a low skilled private sector dominated by cheap labor
- Poor student rankings on international standardized tests as a result of a Weak Education System
- Demographic Imbalance as a net result of other imbalances
“This is not the first time that the urgent need for economic reform has been floated,” said Dhari S. Al-Rasheed, PhD, a signatory to the paper, “but what we seek for this vision is a comprehensive treatment of the economic imbalance that targets the root of the problem rather than its symptoms. It isn’t suitable to deal with the economic sectors as separate units while neglecting the spillover effects of public policies among them.”
Shamlan W. Al-Bahar, PhD, another signatory to the paper added: “This is not the first time that the urgent need for economic reform has been raised and discussed. However, what we seek in this vision is a comprehensive treatment of the economic imbalance that targets the roots of the problem rather than its symptoms. It would be a mistake to deal with economic imbalances as separate units while neglecting the spillover effects of public policies across them. Our aim is not to propose short-sighted solutions that disregard their long-term effects, or superficially associating them to the state’s financial situation, so that the calls for reform are not contingent on the price of oil.”
‘Before It’s Too Late’ sets forth a corrective vision divided into five axes that should be taken as an integrated approach, it includes:
- A private sector with added value to the national economy.
- Openness to neighboring regional markets by expanding trade relationships.
- Small and medium enterprises that expand the economic base and create national job opportunities.
- Defining the concept of “future generations”, clarifying the objectives of their reserve, and defining a general framework for the timeline and the circumstances that warrant withdrawing from it.
- Periodically assessing the use of state-owned industrial and agricultural plots to prevent subletting and use contrary to their intended economic objectives.
- Reforming social and consumer subsidies by allocating them equitably based on income level.
- Modifying the salary scale in the public sector to reflect the productive value of each job and achieve competitiveness with the private sector.
- Imposing a tax on businesses for employing foreign workers, and directing their revenues to incentivize and train Kuwaitis to work in the private sector.
- Increasing the research budget and raising the standards for obtaining it.
- Establishing a public commission to implement the immigration and residency policy and regulate the recruitment of foreign workers and their rights and obligations.
The paper was authored by 29 distinguished scholars who specialize in economic and business administration at the College of Business Administration at Kuwait University. They were at the academic frontlines during the 2008 economic crash, and have continued to monitor the influx of data and research that has emerged since and its continued consequences on Kuwait. Their ethos is based on concrete economic and scientific research that offers well-rounded and viable solutions.
The 29 scholars behind this vision are:
- Nawaf M. Al-Abduljader, PhD
- Abdulrahman M. Al-Taweel, PhD
- Shamlan W. Al-Bahar, PhD
- Dhari S. Al-Rasheed, PhD
- Saoud A. Al-Thaqib, PhD
- Barrak G. Al-Gharablli, PhD
- Ahmed M. Ashkanani, PhD
- Yaqoub A. Baqir, PhD
- Mohammad N. Al-Marzouq, PhD
- Sulaiman H. Al-Bader, PhD
- Abdulrahman A. Al-Rifaie, PhD
- Hessa H. Al-Aijan, PhD
- Salman A. Al-Jazzaf, PhD
- Saad A. Al-Nahid, PhD
- Ahmed F. Al-Qassar, PhD
- Abdullah S. Al-Awadhi, PhD
- Mohammad I. Askar, PhD
- Yousef J. Abdulsalam, PhD
- Abrar A. Abul, PhD
- Ali E. Dashti, PhD
- Sayed M. Al-Mahri, PhD
- Abrar R. Al-Hassan, PhD
- Hussain A. Ali, PhD
- Sarah E. Khalaf, PhD
- Dalal S. Ahmed, PhD
- Zainab M. Al-Bader, PhD
- Mohammad J. Ghlom, PhD
- Ebrahim K. Al-Ebrahim, PhD
- Asma’a A. Al-Fadhel, Ph
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