KUWAIT CITY, Jan 9: A report from the General Secretariat of Planning has revealed that Kuwait allocates approximately 80% of its total annual expenditures in the state’s general budget to salaries and subsidies. The report highlighted a productivity challenge due to a weakness in worker productivity and emphasized the ongoing reforms to modify the demographic composition in the country.

The private sector continues to attract non-Kuwaiti labor, while the public sector remains attractive to Kuwaiti workers in the medium term. The report warns of potential deficits in public spending on salaries and subsidies if global oil prices decline in the medium and long term. The development plan for Kuwait includes initiatives to strengthen the private sector, enhance citizens’ capabilities, and create an active local labor market. Cooperation from all segments of society is deemed essential to implement these initiatives and empower the private sector to play a more effective role in the Kuwaiti economy.

In terms of the Kuwaiti economy, the report notes that Kuwait has been spending 80% of its total expenditures on salaries and subsidies. Public spending has seen fluctuations in recent years, with a decline in 2020 due to the impact of the COVID-19 pandemic. Despite efforts to rationalize expenditures, public spending has gradually increased in 2021 and 2022 with the economic recovery. Unemployment rates in Kuwait, especially among citizens, have been generally low due to the state guaranteeing jobs, particularly in the public sector. The report indicates fluctuations in unemployment rates and highlights the unique context of Kuwait compared to developed countries.

Productivity rates have experienced fluctuations, indicating weaknesses. The report attributes this to the significant volume of foreign remittances from non-Kuwaiti workers. The population structure has changed, with a decrease in the percentage of foreigners and an increase in the percentage of citizens. Government reforms, including the introduction of the biometric fingerprint system and smart worker ID, have contributed to addressing demographic imbalances. The report underscores the importance of ongoing government efforts to reform and enhance demographic composition.

By Mahmoud Shendi
Al-Seyassah/Arab Times Staff