Life without oil

munaOil prices have fallen rapidly. This crisis will have social, economic and political repercussions in the short term with possible negative results on the regional and international levels. But how did this happen? Will all Gulf countries face the same fate? Or will we in Kuwait be an exception because we do not know what the end of a welfare state means?

In Kuwait, most published official statements so far reflect apprehension and anxiety, with some wishes and hopes for things to go back to normal and former highs in order to live the dream. According to some Western analyses, this rapid fall in prices is linked to a variety of reasons, including the regional policies in Gulf countries. This is possible, but it might be inapplicable at this time. Because a fall in oil prices is not impossible to happen in a capitalist system. It’s a major problem like any potential global crisis and recovery if possible if the state knows how to deal with the issue with minimal damage while maintaining internal cohesion.

For about 60 years in Kuwait, we were totally dependent on the sale of crude oil and there was no diversification of sources of income. This is the bitter truth. While our neighbors were competing with tourism, industries and investments, we occupied ourselves with local and regional problems. We even took sides to stand with political Islamist groups and others in total preoccupation with partisan issues, mostly personal, missing opportunities and nitpicking, distracting decision-makers with arbitration and appeasement instead of initiatives and development strategies.

Here in Kuwait, everyone has lived in the kind and generous arms of the government, yet today when we hear reports about the possibility of lifting some government subsidies on goods and services, including gasoline, and stopping some services, we do not know what to do and feel anxious.

I am a supporter of taxation systems in all modern countries. It creates the sense of making a citizen a partner in building his country and not just be a recipient of services, and this may be part of compulsory economic policies. But these reforms require decisive and courageous decisions that affect the pillars of the economic system and political cohesion among all segments of society, and sometimes there is no escape from such procedures, known as austerity or belt-tightening, and there is no better example than the increase of fuel prices in Saudi Arabia and the United Arab Emirates.

The issue of raising gasoline prices is not a problem in itself, but this procedure is usually followed by additional duties and taxes and raising water and electricity tariffs and other prices, which will not only burden the citizen, who is used to a prosperous standard of living, but he will not know how to coordinate and organize his lifestyle and living expenses in the wake of this sudden change. This reminds me of an Egyptian play where an ordinary man was plucked from the street to sit on the throne, and thus behaved erratically and interfered in every decision issued. He was not ready!

It is the right of any government in the world to impose taxes on citizens and residents as required to liberalize the economy and diversify its functions. Such a task is presumably made by a democratic elected government, so people can hold it accountable in the event of a failure, but the subject is not debatable here, so how will it be solved? It’s another dilemma facing the issue of raising the prices of services in the country today.

Some people are wondering why the total amount in the state general reserve is only KD 42 billion? And what is the government’s policy in its expenses and squandering of public funds before asking citizens to pay more for gasoline? I think it’s a worthy question, but it will not get an answer.

Changes in domestic economic policies need strong solidarity in the community. The isolation or retreat of some political groups here does not mean they approve of the overall situation, as the National Assembly carries the burden of public decisions affecting the state and people, so the implementation mechanism of the government and its safety measures must be transparent and under observation, and this cannot be done in this period of superficial calm.

For example, we do not know what the government’s demographic strategy is, as Kuwait’s population by the end of 2015 reached 4.233 million people, an increase of 31,000 citizens and 110,000 expatriates. Will expats face the same taxes and fees in light of their low and unequal salaries here?

The government is in need of urgent surgery now to know how to market the idea of raising the prices of services, with a strategy on who will be their target category in society with a clear explanation on the status of expats under these new regulations.

This article was published on 02/01/2016