KUWAIT: In recent years, Kuwait has been discussing ways to readjust its generous welfare system in order to face economic challenges capped by concern over a projected budget deficit in 2021. On this regard, the idea of eliminating subsidies or making them only accessible for Kuwaiti citizens have been floated during discussions in both government and parliamentary meetings.
Last week, MP Jamal Al-Omar suggested that removing subsidies from some goods and services, such as energy and fuel, can help the state save up to KD7 billion. The statement reflects a growing sentiment within Kuwait’s National Assembly which says that access of foreigners to subsidized services – something that has been ongoing since the state’s independence over half a century ago – needs to end sooner than later in order to maintain the budget while at the same time guarantee sustained welfare for Kuwaitis.
Similar statements are increasingly becoming the cause of frustration within Kuwait’s expatriate community, which makes up an estimated two thirds of the population. Some MPs who support that idea have previously insisted that their proposals or draft laws were not anti-expatriate, motivated by xenophobia or come with a hidden target to cut the country’s expatriate population.
But one statement came most recently from inside the parliament to argue that ‘forcing foreigners to pay the actual price of services will not be very effective in the state’s rationalization plans.’ “While subsidies cost the states around KD6 billion, it is important to point out that not all of that money goes to the citizens,” said MP Adnan Abdulsamad, the president of the Parliament’s Budgets and Final Accounts Committee.
A longtime parliamentarian with stints in economic-oriented panels including the budgets, financial, and public funds protection committees, Abdulsamad told Al-Rai daily that at least KD2 billion in subsidies are paid to state departments annually. “For example, the Kuwait Petroleum Corporation pays its electricity bill at the rate of 1 fils (0.001 Kuwaiti Dinar) per 1 kilowatt that costs the state up to 47 fils to produce,” Abdulsamad said.
Abdulsamad believes that the state should rationalize subsidies provided to state departments while the parliament focuses on ways to improve citizens’ welfare. On electricity, Abdulsamad suggested a unified system under which consumers are categorized based on their income. “Rationalizing subsidies should not affect those with limited and middle income, and [the system] must be the same applied at residential or investment areas,” Abdulsamad added. A proposal currently reviewed at the parliament suggests removing subsidies from lands classified as ‘investment’ territories where apartment buildings can be built, while keeping them in ‘housing’ lands used by Kuwaitis to build government structures.
“Income should be the standard,” Abdulsamad emphasized, adding that the state should continue to give expatriates access to subsided services “from a humanitarian standpoint since they already pay for rents, education of their children, visa fees, health insurance and other expenses.” “We should not assume that depriving expatriates the subsidies will save the budget simply because they make up the majority of the population,” he insisted.
The government’s reluctance to increase financial allocations for citizens over concern regarding their potential impact on the status of the economy has been the strongest challenge for MPs who have been trying for the past few months to raise monthly payments such as the children and rent allowances. It seems now that lawmakers’ attention have turned to foreigners in order to boost Kuwaitis’ allocations while at the same time preserve the national budget. But for some Kuwaitis including Abdulsamad, proposals to remove subsidies from expatriates only reflect a ‘narrow-minded view’ on the topic at hand. “A majority of expatriates receive limited income,” Abdulsamad reiterated. “Removing subsidies from electricity, water and fuel should not affect the middle class – Kuwaitis and expatriates alike”.
By Staff Reporter
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