Nod to budget with huge deficit – 60-40 expat ratio eyed
KUWAIT: HH the Prime Minister Sheikh Jaber Mubarak Al-Hamad Al-Sabah yesterday affirmed a resolve to implement a visionary strategy architected by HH the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah to transform Kuwait into a lucrative business and cultural hub. He was speaking during the launch of Kuwait’s long-term development plan till 2035, dubbed ‘New Kuwait’, held at Sheikh Jaber Al-Ahmad Cultural Center late yesterday.
Serious steps were taken over the past years “to translate His Highness the Amir’s outlook for activating development, boosting the economy, diversifying productivity, pressing ahead with economic and financial reforms through mega projects and leading role by the private sector,” the premier said. Sheikh Jaber Al-Mubarak affirmed the necessary role of the youth to implement “the new Kuwait outlook for achieving honorable living and bright future for youngsters and the next generations”, hoping that they would lead the process of building the aspired modern state.
Speaking at the event, Minister of Social Affairs and Labor Hind Al-Sabeeh said the country’s demographic plan estimates that the percentage of expatriates will drop to 60 percent from the current 70 percent by 2030. She said that the higher population committee has drawn up its plan, which is based on achieving the 60-40 ratio by 2030. At present, the number of expatriates is 3.1 million against 1.33 million Kuwaiti citizens, a ratio of 70-30 in favor of expatriates.
The low percentage of nationals has triggered strong attacks from a number of lawmakers who described expatriates as colonial settlers, with MP Safaa Al-Hashem calling for taxing them for walking on the streets. Sabeeh however said that Kuwait is forging ahead with a large number of mega projects and there will be a big place for expatriates who are needed to take part in those projects. The Assembly is due for a debate on the demographic structure in the country on Thursday.
Sabeeh was among a host of ministers who spoke on the New Kuwait strategic plan, which aims at diversifying the national economy to reduce its dependence on oil revenues. State Minister for Cabinet Affairs Sheikh Mohammad Al-Abdullah Al-Sabah told reporters that the ambitious plan aims at raising Kuwait’s revenues from KD 13.3 billion next year to as much as KD 50 billion in the last year of the plan. He did not elaborate on the means to achieve this. But he listed a large number of mega projects including Silk City, the Subbiya Causeway, Boubiyan Island container harbor and others as some of the projects.
Also, the government yesterday approved the 2017/2018 budget with a projected huge deficit for the third year running due to the sharp fall in oil prices. Finance Minister Anas Al-Saleh, also speaking at the New Kuwait event, said the fiscal year’s budget which begins on April 1 is projecting a shortfall of KD 6.6 billion ($21.6 billion). The deficit is 25 percent less than the projected shortfall in the current 2016/2017 fiscal year estimated at $29 billion, due to an improvement in oil prices.
Revenues are projected at KD 13.3 billion and spending is estimated at KD 19.9 billion, the minister told reporters. The budget becomes official only after the National Assembly approves it. Oil revenues are projected at $38.4 billion, up 36 percent on the estimated oil income in this year’s budget, Saleh said. Despite the sharp slide in oil prices in the past three years, income from oil is still projected to make up 88 percent of Kuwait’s total revenues, he said.
After posting healthy surpluses for 16 years in a row, Kuwait posted a budget deficit in 2015/2016 which ended March 31 last year. In previous years Kuwait built up a sovereign wealth fund worth around $600 billion that is invested mostly in the United States, Europe and Asia. As part of efforts to reduce the shortfall, the state hiked the price of petrol in September and plans to raise electricity and water charges.
By B Izzak and Agencies