On Wednesday, the Kuwait National Assembly approved a budget that even one of its members characterized as “crazy”: a record $70 billion in spending, of which 90 percent will go to fuel subsidies and salary increases for a variety of public employees, including teachers and military personnel.
“The regime is not threatened right now, but they want to avoid any kind of political headache,” said Amr al-Tameemi, an economist and former chairman of the Kuwait Economic Society. “They want to make everybody happy by spending on luxury items.”
For years Kuwait has used oil revenues to spend lavishly on its citizens, who have come to expect the state to provide cradle-to-grave care. Most are employed by the state, pay no taxes and enjoy access to free or heavily subsidized goods and services.
Kuwait is following the lead of its much larger neighbor, Saudi Arabia, which has also escaped the widespread unrest and calls for change sweeping the region, in part by opening its treasury and spending $130 billion to pump up salaries, build housing and finance religious organizations.
Kuwait, which has been ruled by the Sabah family since 1752, is the most democratic nation in a region where the rights of citizens are strictly controlled and their say in government is limited or nonexistent. Though political parties are banned, Kuwait has an elected Parliament that is often outspoken.
The country, a sliver of desert sandwiched between Iraq and Saudi Arabia on the western shore of the Persian Gulf, has a population of about 2.6 million and the fifth-largest known reserves of oil.
Analysts said there appeared to be little serious threat to the Sabah family’s reign. Nevertheless, with a populace already accustomed to making political demands, the leadership is not willing to leave its fate to chance. That is especially true amid a revolutionary season that has seen the fall of leaders who commanded far larger nations, including the presidents of Egypt and Tunisia.
So, as it ended its legislative season, the Parliament passed the most extravagant spending plan in Kuwait’s history.
The head of the parliamentary budget committee, Adnan Abdulsamad, described the fiscal plan as “crazy,” according to The Kuwait Times. The newspaper reported that the budget included a projected deficit of $21.87 billion. It also said that other legislators had warned that the government appeared to have no plan to carry out $295.29 billion worth of previously approved development projects that have fallen behind schedule.
“This is an inflated budget, and it is not sustainable,” Mr. Tameemi said. “If there is any decline in the price of oil, they are going to face the prospect of deficit financing.”
The desert kingdom, which has close ties to the United States, has demonstrated its skittishness over the Arab Spring in other ways as well.
In early April, Kuwaiti security forces detained more than a dozen Egyptian citizens who lived in the country for attending meetings in support of Mohamed ElBaradei, a Nobel Prize-winning opposition figure running in Egypt’s presidential election. Under a 1979 law governing public gatherings, it is illegal for resident noncitizens to attend demonstrations or public gatherings, according to Human Rights Watch. Within 48 hours, the government had deported 21 Egyptians.
While the government may have chosen in the past to deal harshly with some residents, analysts said that when it comes to Kuwaiti citizens, the state prefers to speak the language of dollars and cents.
Critics said the new Kuwaiti budget was not only financially unrealistic but also overly reliant on high oil prices.
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