Kuwait: It’s time to change the model of the “welfare state”; Unsustainable

Posted: October 28, 2013 in Iraqi Dinar/Politics
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Kuwait warned its citizens on Monday that model “welfare state” adopted by the Kuwaitis care from the cradle to the grave unsustainable It is time to change it.

Prime Minister Sheikh Jaber Mubarak Al-Sabah, through the provision of his government’s program for the next four years to the parliament, “The truth that everyone should mindful, is that the current welfare state which she is accustomed Kuwaitis are not viable.”

The program, which covers the period up to 2016-2017, to do a re-look at the prices of goods and services in support of the government as well as the adoption of a system my taxes in the country gets 94% of its income from oil where citizens do not pay any taxes companies.

The government also promised to cut public spending, especially the current expenditure, which includes salaries, support, and defense spending.

The Finance Minister, Sheikh Salem Abdulaziz Al-Sabah said last week that the current expenditure accounts for 85% of the budget.

The President called on the government to “the necessity of the Kuwaiti society shifted from the consumer to the capabilities of the country to the product.”

The government has warned that the survival of things for what it is without the reform will cause the registration of real Kuwait’s budget deficit starting from the year 2021.

The government predicted that in this case, سيتراكم the deficit to reach to 414 billion dinars ($ 1.46 trillion) in 2035.

For example, did not change fuel prices during the last 15 years in Kuwait, while electricity sold to citizens and expatriates at a price not exceeding 5% of the cost price.

The International Monetary Fund urged Kuwait earlier this month to cut public spending, which has tripled in seven years, so as to reduce the risk for any drop in oil prices.

The Fund also urged rich Gulf state to accelerate structural reforms and re-energize a late development program worth 110 billion dollars, as well as the reduction of government support for prices.

According to figures from the Kuwaiti Ministry of Finance, the size of the public spending rose from $ 24.4 billion in the 2005-2006 fiscal year to 68.2 billion dollars in the 2012-2013 fiscal year, has increased the size of salaries in government institutions in the same period from $ 6.7 billion to $ 17 billion .

In the same period, oil revenues rose from 45.9 billion dollars to 106 billion dollars.

Kuwait recorded cumulative surpluses over the past 13 financial years amounted to 300 billion dollars, while its sovereign fund assets rose to more than $ 400 billion.

But the political pressure negatively affected the development of the country’s rich.

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