Kuwaiti Government To Keep Reviewing Subsidies

Kuwait’s government will continue a review of its heavy spending on subsidies under a new cabinet appointed this month, the new finance minister said on Tuesday.

“There should be a decrease in general but they will not be eliminated,” Anas al-Saleh, who took office last week, told reporters on the sidelines of a session of parliament.

“It is only to make sure that the subsidies are going to the right people, that they are not going to people who do not need the subsidies. So in other words, we are not thinking of a decline for people who need subsidies.”

The government said last November that it would form a special committee to review its sometimes wasteful spending on subsidies for goods and services, which cost over 4.5 billion dinars ($15.9 billion) a year.

Despite Kuwait’s oil wealth, some of its own financial experts, as well as the International Monetary Fund, have warned that the state budget could fall into deficit in coming years at current rates of spending growth.

But cutting subsidies is politically difficult because of longstanding tensions between the cabinet and parliament, where many lawmakers campaign to raise social benefits.

Last week’s cabinet reshuffle was triggered by the resignations of several ministers after friction between lawmakers and members of the cabinet, in which officials from the ruling al-Sabah family hold top posts.

Saleh, a former minister for commerce and industry, is part of a younger generation of Kuwaiti ministers. He worked at financial firms in Kuwait after studying business administration at the University of Portland in the United States.

He said charging consumers more for state utilities was among the options being considered in the subsidies review. But he made clear that he understood the political sensitivity of such a step.

“The thought is there and it has to be step by step, and to make sure that there are not sudden actions – it has to be well-planned.”