End of Kuwait welfare state
Positive expectations suffered a setback in Kuwait when the government warned that the welfare state as we know it could end by 2020. And while this alarming news was supposed to give everyone a wakeup call, the number of those who started researching the reasons that could lead to the end of the welfare state is very limited.
The problem in the media and parliamentary platform in the Arab world is that people 'jump' to the details regarding a certain issue which in some cases should rather be ignored, especially when it comes to fateful issues. In Kuwait, the moment news came about the government's 'end of welfare state' announcement, the media and MPs should have focused on discussing alternatives that could help Kuwait avoid such a fate.
The first step to achieve this goal is to admit that we have a problem, then move to fixing the errors that are threatening the national budget. Kuwait dropped three spots in the 2013 World Bank report on the Ease of Doing Business, settling at 104, which ranks the country in the last place among the other Gulf Cooperation Council countries. The World Bank ranks economies from 1 to 189 based on the ease of doing business index.
The ranking depends on the average for a country's ranking in ten different subjects that include starting a project, obtaining building and electricity licenses, property registration, insurance and investor protection policies and taxes and settlements in case of insolvency.
According to the information mentioned in the World Bank's report, starting a business in Kuwait requires 12 procedures, an average of 32 days and 1.1 percent of the national income per capita. Meanwhile, the report indicates that starting a business in any Organization for Economic Cooperation and Development member state requires 5 procedures, an average of 11.1 days and a cost that reaches 3.6 percent of the national income per capita. The 2013 report ranks Kuwait in the 152nd place among 189 economies in ease of starting a project, while the country ranked 143rd in last year's index. Kuwait also dropped in the ease of licensing index from 127 to 133, and remained in 11th place in tax payment.
In my opinion, Kuwait has all the tools and necessary infrastructure but lacks systems and regulations that lead to reform. Bureaucracy and political struggle will definitely lead Kuwait into ending the welfare state; and could also lead us to a situation in which Kuwait as we know it would no longer exist. We need a clear economic vision that addresses all fields, especially the financial and oil fields, in order to seize opportunities in mega developmental projects more dynamically. Meanwhile, decision makers can focus on improving the organizational business environment in Kuwait on par with that of other economies, in order to secure sustainability of the welfare state as long as Kuwait continues to attract businesses. — Al-Rai
By Saad Al-Rushaid
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