Kuwait enjoys oil revenues that are directly proportional to global inflation. At the same time, the Kuwaiti government, which is the largest employer of national workforce which is more than 83%, adopts a salary scale that is not linked to inflation. Even the Kuwaiti private sector, which is the largest employer of foreign labor in the country, is not very committed to global inflation due to the possibility of bringing in cheap labor from anywhere in the world.
Despite the many defects of the Kuwaiti model and its inability to continue indefinitely, a local Arabic daily says, the painful economic effects in crises are very limited on citizens, as happened in the aftermath of the invasion of the country in 1990, the global financial crisis in 2008, the Corona pandemic in 2019, and the current global inflation crisis.
However, all of this and more does not exempt citizens from changing their consumption behavior in order to contribute effectively to fighting local inflation factors, which requires special awareness.
In the midst of these come painful measures to fight inflation in the developed world, as major companies announce layoffs of thousands of employees around the world. With the rise in interest rates, the increase in strikes, and demands for higher wages due to the high cost of living coinciding with the entry into an economic recession, many companies have no choice but to make difficult and painful decisions, including the layoffs of thousands of workers.
Even the effect of raising interest rates in Kuwait will not be anti-inflationary, as is the case in the rest of the world. Given that Kuwait imports all its needs from countries of the world that suffer from inflation for many reasons related to the repercussions of the Corona pandemic, the Russian-Ukrainian war, and others, and the high global energy prices are still cheap and subsidized locally.
No matter how great the government’s financial capabilities are to fight inflation, citizens’ continued purchase of non-essential products and services, no matter how unjustifiably high their prices may make salary increases, energy subsidies, and even subsidized supplies and other materials useless, while many citizens of the developed world suffer from painful measures in order to fight inflation, all that the Kuwaiti citizen must do is to fight unjustifiably high prices by raising awareness and changing consumption behavior.