Government expenditure

Muna Al-Fuzai

There are undoubtedly several important issues before the National Assembly such as the bedoons’ law, new cities and others, but I as a Kuwaiti citizen hope the parliament looks at the issue of government spending among its agenda. This topic is very important for Kuwait’s interests and international reputation, so a joint national project between the government and the Assembly should be launched to control public expenditure within a specified period of time.

The basis of this project is to ensure new projects are not launched unless they have a guaranteed return, and reduce spending on other non-priority areas with administrative and parliamentary supervision over spending. I think, for example, that building new cities without services for the population is not as important as new roads and repairing damaged streets.

Reports have been spreading for days about the possibility of rain, and although rain is liked by people, what people remember is that last year, rains inundated parts of Kuwait and roads were lined with submerged cars, raising concern. These matters may seem small, but are a major issue for the public. I think it is better to criticize the government for the delay in the completion of projects than to lose those projects in full because of mismanagement or lack of completion.

The new government spending project does not aim at reducing public expenditure. How much society needs various projects and differentiating among them on the basis of their collective benefit should be considered, and only then spending on these projects should be determined.

For example, the 5 percent VAT approved by the six-nation Gulf Cooperation Council (GCC) for nearly four years has not been implemented in Kuwait, but spending efficiency is better than resorting to tax increases to reduce public deficit. I believe that the efficiency of government spending is a guarantee for economic growth of the state and makes it immune from potential pressures due to global economic conditions. It is perhaps the only remaining means of financial sustainability.

We tend to hear that the reason for general waste is salaries, which makes up nearly three-quarters of spending in Kuwait, but this should not be the reason for more spending. I know that the issue of government spending in many countries around the world is difficult and burdened by complexities, because there are multiple ways of spending and decentralized decision-making, but remains essential to avoid possible risk from global trade tensions and uncertainty in oil prices.

Because of large budget deficits and reliance on volatile commodity prices, government spending needs to be addressed with a more strategic approach. The decline in oil prices will not only affect the Gulf region, but the entire Arab region, especially as the Gulf countries are the most important trading and investment partners of all non-oil exporting countries. So, focusing on spending efficiency is important.

These factors require the importance of continuing and accelerating the pace of financial and structural reforms to increase economic resilience and stimulate the growth of the private sector to be a partner in development and not only a beneficiary. The optimal use of financial resources is not just a wish but an irreplaceable choice. I believe that achieving efficiency is one of the issues that requires consensus between the legislative and executive branches of the country.

By Muna Al-Fuzai

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