 |
| A Kuwaiti woman casts her vote. As pressure builds on public services, many Kuwaitis have ratcheted up rhetoric against expatriates © Noufal Ibrahim/EPA-EFE/Shutterstock |
When Kuwait’s prime minister returns to office in the coming weeks, he faces an apparent paradox: the Gulf state with a $550bn sovereign wealth fund is running short on cash to pay ballooning public sector salaries.
Oil accounts for 90 per cent of its revenue, but slumping prices have hit the western ally’s income hard, putting its forecast deficit close to 40 per cent of GDP, higher than it was in the 1990s, during the financially perilous aftermath of the first Gulf war when Iraq invaded Kuwait.
While other Gulf states have turned to global debt markets to fund themselves through the pandemic, Kuwait is hamstrung by parliament’s refusal to renew a debt law that elapsed in 2017. Any attempt to tap into the country’s large sovereign wealth fund is also opposed by lawmakers as it would undermine its function as a nest egg for future generations.
Long criticised for failing to prepare for a post-oil future even as it built one of the world’s largest wealth funds, the crisis in Kuwait illustrates how even wealthy Gulf states have been rocked by coronavirus and plunging oil prices.
The economic crisis has forced a political reckoning — early December elections have delivered a strong showing for opposition and younger candidates, with 31 new lawmakers in the 50-member parliament. Emir Sheikh Nawaf al-Ahmad al-Sabah, who took the reins in September following the death of his brother, a revered global diplomat, this week reappointed the prime minister, Sheikh Sabah al-Khaled al-Sabah, to form a new cabinet.
No comments:
Post a Comment