Believe it or not but it is true that Kuwait, one of the richest states in the world, is rapidly running out of money.Kuwait is one of the richest oil-rich states in the world, but the situation is changing rapidly, Bloomberg said in a recent report.The Organization of the Petroleum Exporting Countries (OPEC) this year reviewed the decline in global demand for oil due to the coronavirus and re-set prices, but the $40 a barrel price is still considered insufficient.
Anas Al-Saleh, Kuwait’s former finance minister in 2016, warned that it was time for Kuwait to cut costs and prepare for a post-oil life.
Slow to adjust big-spending habits as oil revenues fall, the Gulf states are hurtling toward a moment of economic reckoning, prompting renewed debate over the future of nations that for decades bought popular loyalty with state largesse. “We’re going to wake up one day and realize we went through all our savings, not because we didn’t check our bank statement but because we looked at it”, said minister.
The UAE has also reduced its dependence on oil and turned Dubai into a logistics and financial hub, but Kuwait has been slow to make such changes, largely because there are differences between elected parliament and state’s emir.
Despite the crisis, Kuwait has set up the world’s fourth-largest fund of 550 billion to continue its development journey even after the oil runs out, but it is currently unable to use it.
Some Kuwaitis believe it is time to use the fund, but opponents say the savings will run out in 15 to 20 years without economic reforms and job creation.
