Economic sources say they fear the delay in approving the new budget may have negative impact on the economic performance, especially since most development projects in the country have slowed down in terms of their implementation since before the outbreak ofbthe Covid-19 pandemic due to the deficits that have accompanied the country’s budget since fiscal 2014-2015 until the repercussions imposed by the epidemic.

Although the indicators of recovery continue with the support of the rise in oil prices, which heralds record surpluses for the current fiscal year, the delay in approving the budget and political disruption will lead to negative results on major projects expected to be implemented according to the development plan, due to the rapid changes that have occurred in the global economy accompanied by rising inflation and increasing supply chain disruptions, as well as the ongoing repercussions of the Russian-Ukrainian war, reports a local Arabic daily.

All of these factors will undoubtedly increase the cost of implementing projects by tens of millions of dinars if not hundreds of millions, in addition to time and more opportunities wasted.

The sources indicated that the slow pace of development in the country will have wide-ranging repercussions at several levels and sectors, which can be summarized as the following:

1 – The high cost of projects

Follow-up sources confirmed that the delay in launching government projects will lead to an increase in their cost due to the rise in inflationary pressures, both in terms of the raw materials needed to complete these projects.

This is in addition to the fact that many companies and contractors rely on bank finances to provide the necessary liquidity, and after the high cost of loans in terms of interests there is no doubt that companies will demand an increase in the value of contracts for pending projects, both current and future, and this requires expediting the approval of the general budget so that government agencies can complete the contracting procedures for their projects.

2 – Deceleration of achievement

The progress of development projects in Kuwait suffers from several difficulties that have affected their completion rates.

The delay in approving the new budget project is a major reason for the disruption of the government projects’ progress within the development plan, and consequently their failure to meet the stipulated dates, which also negatively affects the achievement rates in the projects, wasted time and wasted opportunities.

Although the Ministry of Finance emphasized in its disbursement circular that the supervisory authorities should give priority to the projects of the annual development plan, provided that the completion of their procedures is expedited, and that the disbursement of these projects is carried out in accordance with the instructions contained in this circular, but the postponement of the contracting procedures from would affect the achievement rate.

3 – Problems of contractors

Most of the contractors working in the fields of building and construction suffer from the problems of high prices, supply chains and shortage of labor, and sources in the sector confirm that there are continuous meetings between the major contracting companies to discuss realistic and practical solutions that ensure the continuation of the implementation of projects after approving the budget and addressing the financial and logistical obstacles that have arisen since the cost increases with time.

Earlier, a video was posted advising local contractors not to complete any work during the current period due to the successive rises in the prices of building materials, which may expose them to significant losses if the contract is completed according to the old prices.

4 – Cessation of development operations

Many government agencies wish to undertake projects that contribute to the development of their business and help them in providing digital and modern technological services, but the delay in the completion of these projects is an obstacle to the government development process.

5 – New hires

Failure to approve the ministries’ budget will obstruct new appointments in government agencies, which will lead to an accumulation of waiting numbers seeking government jobs.

The Ministry of Finance Circular No. 2 of 2022 regarding the controls of disbursement of government agencies until the issuance of the budget linking law states that it is not permissible for government agencies to sign new contracts for fiscal 2022/2023 before the approval of some budget sections by the National Assembly or the issuance of the law linking the budget for the fiscal year.

Government sources indicated that the Ministry of Finance, for its part, has taken some measures that would limit these effects, as it confirmed in its circular that government agencies may, after obtaining their approval, take measures to offer the practices and tenders mentioned in the government entity’s draft budget for the year 2022-2023 which the Finance Ministry has submitted to the National Assembly, provided that contracting procedures are not completed until after the approval of some sections of the budget by the parliament or the issuance of the budget linking law.


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