Huge tasks await ministers in the new government 

His Highness Sheikh Sabah Al-Khaled has been assigned to form the new government and there are prominent issues at hand which need to be solved – a package of urgent economic and financial issues — that await the formation of the new government in the coming days.

Although there is nothing ‘new or old’ on the economic and financial fronts, since these issues have never missed an open discussion, whether at government or parliamentary, or even popular level and among the specialists, it can be said that in light of the current exceptional financial and economic circumstances, amid the complexities of the markets, the need to choose specialist ministers in the next government formation is growing taking into account the various risks that threaten Kuwait financially, economically and categorically.

The most urgent economic and financial files are related to the challenges posed by the liquidity ‘crisis’ that puts pressure on the general budget and classification of Kuwait, the slow pace of development locally, in addition to the continued absence of the private sector from its expected role in supporting the local economy, and finally the continued delay in filling vacant positions at several levels.

Perhaps the beginning is with the next Minister of Finance, who will have to sift through a list of difficult files that require careful surgery, especially for the expected public revenues of the state during the coming period, its liabilities, and the deficit that follows. Here, the most important of these files can be recalled:

Structural defect 

The new finance minister will have to be ready to work quickly and efficiently to address the structural defects in the public budget, and to provide executive remedies that can guarantee an increase in non-oil revenues, provided that this does not affect the livelihood of middle-income and low-income citizens.

Of course, with the increase in revenues, all expenditures need to be rationalized carefully and according to applicable scenarios, and not just a number or percentage that every government entity is obligated to achieve, bearing in mind that the main challenge in reducing public expenditures appears in the cost of salaries and subsidies, which exceed 70 percent of total public expenditures.

Budget deficit 

Perhaps it is no secret that the general budget last fiscal year recorded a historical deficit of 10.8 billion dinars, while the International Monetary Fund revealed in a government presentation that Kuwait is likely in 2021 to lose its historical position in terms of the percentage of financial deficit compared to the Gulf countries, as it is likely according to its expectations that Kuwait occupies the first place in the Gulf region for the current year in terms of its non-oil fiscal deficit rate of 68.7 percent.

In order to avoid these risks, a convincing debt program must be presented to the National Assembly and to the people, to ensure the passage of the Public Debt Law, and other reform laws whose approval requires the approval of the Parliament.

State property 

This file is considered one of the complex and very important files, as it constitutes a double headache for the Minister of Finance, and was termed ‘the mother of problems’ for more than one minister who has succeeded in this ministerial position for years, as it often negated achievements made in other sectors of the ministry, especially with the start of the government support expenditures.

On the one hand, it is increasingly important to reconsider the fee structure of these properties economically, in line with the objectives of the state’s private real estate management, according to the statements of the Minister of Finance in the resigned government, Khalifa Hamada, who stressed that it is not managed according to market forces and prices with the aim of profitability, but rather the main objective of its management was to achieve a public benefit and a social return that has an impact on the citizen (housing, education, health, cooperatives, etc), and therefore the management of state property is not according to market prices with the aim of profitability, but rather with the aim of achieving the public benefit.

As for popularly, it is required that these properties be at the real market value of state property real estate and the percentage of state property revenues achieved with the price parallel to the actual market price.

Between this and that, the future Minister of Finance needs to approve an equation that guarantees the fair pricing of state property, in a way that does not harm the purpose of investing it in the private sector, knowing that according to Hamada, the total revenue generated by the management of state private property and its exploitation during the five years 2015/2016 to 2019/2020, was about 432.5 million dinars.

Inflation 

Of course, inflation is one of the common government files, especially after it has become a more worrying phenomenon, from meat to metals. It is difficult to move anywhere these days without seeing and witnessing the use of the word “inflation.” It is clear that this trend is not transient or temporary, but rather appears digitally as It exists to remain in the markets for long periods, especially since the threat of the epidemic continues to dominate the global economy at a time when the mismatch between supply and demand continues.

In most economies, inflation pressures have increased with the emergence of indications that inflation has become a broader base, and the rise in commodity prices leads to a rise in the main inflation rates, at a time when weather events affected agriculture and increased pressure on food prices, which rose at large rates, according to recent data of the Organization Global food and agriculture, amid slowing supply chains, requires broader government responses to this challenge.

Central Bank of Kuwait 

Everyone is well aware of the importance and sensitivity of this position, and after confirming the news about Governor Dr. Muhammad Al-Hashel’s unwillingness to renew his contract, one of the main entitlements is to choose a capable person with the appropriate capabilities to lead the Central Bank in the coming period, bearing in mind that the term of the Board of Directors is nearing completion, and the term of most of its members will not be renewed, and here the importance of choosing the new Central Bank leader is growing.

Of course, the banner of urgent economic files jumps to the new Minister of Commerce and Industry, and perhaps the most prominent hot files in front of the new minister are:

Resolution of the issues of ‘Sixty’ years old 

Of course, arranging the file of setting up a final mechanism to address the situation of immigrants who hold a high school diploma or less and have reached the age of sixty is not supposed to be at the forefront of the urgent files on the table of the next Minister of Commerce, but given that it has become the most talked about in the past period, and its details and arguments abound, the next minister needs to close it, by a mechanism that ensures that the conditions of this segment are taken into account and preserve the rights of the state, so that he can devote himself to other chronic files.

Small and Medium Enterprises 

It is ironic that the open discussion about the National Fund for Small and Medium Enterprises Development in the recent period reminds us of the same discussion that was opened when it was established about 8 years ago, in April 2013 with a capital of two billion dinars, and practically did not achieve any significant percentage of the target within its vision. Which centers on building a pioneering society that motivates entrepreneurs to innovate and achieve economic development opportunities in Kuwait, by creating and developing the small and medium business sector locally.

In addition to the administrative instability that the fund suffered from, which requires the new minister to work on its administrative stability, and to ensure that those responsible for it prepare plans that are in line with its objectives and contribute to achieving them, bearing in mind that the initiators are in all their stations, the last of which is the economic closures that the government has taken as a measure As a precaution to deal with the spread of the “Corona” virus, they did not find the support or protection that they aspired to from the state for their work.

Hence the need in the future is to legislate the Projects Fund again to perform its role stipulated with the same enthusiasm that began when it was established in the law, taking into account the failures that occurred during the past years, provided that this is accompanied by a speedy decision on the appointment of a general manager of the fund in the original.

Business environment 

Despite the qualitative leap achieved by “Commerce” in terms of improving the country’s ranking in the indicators of improving the business environment and enhancing competitiveness, and completing its entry into all emerging markets, with the promotion in the “MSCI” emerging markets index, one of the files that awaits the next minister is to complete the maintenance of progress in these indicators, And completing the strengthening of the legislative system that contributes to achieving that goal.

On the same level, it is required that Commerce and all its affiliates continue to expand digitally by providing all their services, in a way that guarantees saving time and effort for business owners.

Industrial plots 

The file of the industrial area and the provision of plots of land for industrial activity is still a difficult file facing the Minister of Commerce, as the sector requires that there be a government move to develop an integrated strategy for the industry in Kuwait, and open up industry horizons for young people, provided that this is preceded by a clear vision for the distribution of industrial lands, while facilitating the work of Industries that the Corona virus crisis has proven the urgent need for the local market.

In practice, the local industrial sector needs to pay more attention and focus on it, especially since it is highly relied upon to be one of the main resources of the public budget in increasing non-oil revenues.

Money laundering 

It is known that the Ministry of Commerce has an important role to play in the area of combating money laundering and terrorist financing operations, and it works on it through more than one window, perhaps the most prominent of which is the real estate and gold sectors in the ministry.

Despite the extensive efforts made by the officials of the two sectors, there is a need to develop the capabilities of those in charge of them, as the supervisory interventions that are practiced in the two sectors are new, not traditional, which requires skills that can identify business suspicions in the two sectors, without misusing this power, and there is a need for more of courses and to know the latest developments globally regarding these rapidly developing processes.

It is known that the ministry has an important role in combating money laundering and terrorist financing operations, and it works on it through more than one window, perhaps the most prominent of which is the real estate and gold sectors in the ministry.

Despite the extensive efforts made by the officials of the two sectors, there is a need to develop the capabilities of those in charge of them, as the supervisory interventions that are practiced in the two sectors are new, not traditional, which requires skills that can identify business suspicions in the two sectors, without misusing this power, and there is a need for more of courses and to know the latest developments globally regarding these rapidly developing processes.

Oil 

As for the most prominent oil files required to be tackled by the next minister, are ‘heavy’ and ‘specific’, and can be summarized as follows:

1 – The selection of the next CEO of the Kuwait Petroleum Corporation and members of the corporation’s board of directors should be done in a way that ensures stability in the sector.

2 – Forming the executive team in the affiliated oil companies and their boards of directors.

3 – Enhancing oil revenues and ways to develop the sector’s performance to ensure liquidity that allows maintaining its global position.

4 – Completing the file of restructuring the oil sector, setting a timetable and a mechanism for its implementation, to provide job stability for workers.

5 – Completion of strategic projects, most notably the Al-Zour Petrochemical Complex, due to its ability to bring in billions in revenues, and raising the production and refining capacity in line with the oil sector strategy 2040.

6 – Working to form a new base of cadres and oil leaders to work in the coming years.

Communication Affairs 

Regarding the files on the table of the Minister of State for Communications and Information Technology, as follows:

1 – Preparing the executive framework for cyber security and raising awareness of it a priority.

2 – Providing additional cables to connect Kuwait to the world through Internet services, in order to avoid a malfunction that may stop the entire service, as happened some time ago due to the mistake of one of the project contractors.

3 – Attracting major technology companies to open their offices in the local market, such as ‘Amazon’ and ‘Google’ and others, in cooperation with the Direct Investment Promotion Authority and the rest of the government agencies.

4 – Re-evaluating existing services in the sector to match international standards in this framework.

5- Examining the extent to which Kuwait actually needs new telecom companies and the benefit of granting additional licenses in the sector.

6 – Activating the “Fiber Optic” service for the Internet in various parts of Kuwait, which helps to increase the speed available to customers.

7 – Re-evaluating the prices available to customers in the market and studying the need to adjust them to suit companies.

8 – Activating digital transformation in all sectors through the development of available applications, such as “easy”.

9 – Cooperating with the Central Bank and the competent authorities to grant the necessary approvals to launch digital banks in the country, and to develop their own executive procedures.

‘Development’ needs someone to overhaul it 

Far from the concerned minister and his responsibilities, the development file in all its details is one of the most important files that need to be dusted off in the near future, before it is too late since development has stalled for a while.

It suffices to note that, according to a report by the National Bank of Kuwait, the pace of project awarding declined significantly in the third quarter of 2021, as the total value of awarded projects decreased to 152 million dinars (minus 68 percent on a quarterly basis, minus 57 percent on an annual basis) and according to data issued by “MEED” magazine, the total value of projects awarded in 2021 so far was 916 million.

The importance of these numbers increases when compared with the accelerating movement in the Gulf, to the extent that everyone hears daily about the launch of projects worth billions in Saudi Arabia and others in the UAE as well as in Qatar, although Kuwait preceded all Gulf countries with its vision of Kuwait 2035, and its announced plans to transform into a financial and commercial center in the region, and that is what prompted the Wafra Investment Company to say in a report, ‘The Kuwaiti citizen has the right to feel jealous of what Kuwait has reached compared to its neighbors that preceded them and went ahead of them’.

At last, the real development is the biggest and broadest guarantee for the renaissance of Kuwait and its citizens, and for jumping them over all challenges, whether those related to the budget deficit or those related to employment and ensuring sustainable welfare based on stricter rules in increasing non-oil revenues.