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Monday, November 12, 2012

The struggle against the “oil addiction”: Kuwait’s experience


Opposition demonstrations are in full swing in Kuwait, in spite of the fact that this month and last month the police broke the protesters up several times with tear gas. Yesterday, November 11, the meetings were dedicated to the 50th anniversary of the Constitution of this Arab monarchy. But for the opposition it was only an occasion. That was the topic that Youssef Ibrahim, the Emir’s adviser on the issues of economic policy, touched upon in his interview with the Voice of Russia.

This eminent official enjoys the Emir’s special confidence. Up to now, he has never given extended interviews to Russian or foreign press. The conversation took place in one of the Emir’s palaces, in the office of his adviser. -Mr. Counsellor, today all Persian Gulf countries are drawing up new projects of economic development. It's very understandable: citizens of all Arab countries, even of such well-to-do countries, like Kuwait, are demanding improved living conditions. What are you planning to do to meet those requests?

These problems have long become ripe in Kuwait. Once the first oil was found in the country, the question of allocation of these revenues in the best possible way immediately arose. There were three main goals. Firstly, to improve citizens’ welfare. Secondly, to give impetus not only to the development of the oil sector, but to other branches of industry, as well. Thirdly, to develop human resources, educate and train personnel. But today the most serious challenge is the rapid growth of population.

They say Kuwait has allocated large sums for new projects.

The current development plan allocated 34 billion dinars (about $ 120 billion calculating on five years, - Ed.) for long-term economic development projects. Kuwait has achieved success in many fields. For example, everything is quite all right with education. Secondary and higher education in Kuwait is at a very high level. But nevertheless, the state on a permanent basis sends students abroad to study in the best universities, as well. Since 2000, private universities have been opening in Kuwait. This gives the citizens broader opportunities of receiving an education.

The citizens of Kuwait have so many privileges, that some experts jokingly say you are one of the few countries, where socialism was really built. Do you agree with that?

All our laws say that we have capitalism. And for the sake of the future it is even more important to develop the private sector, small and average business, and individual initiative. But our state really provides great assistance to the citizens. But the question is: can this go on endlessly? Life requires changes. Perhaps, not all the measures will be popular. But it is better to take a spoonful of a bitter medicine now than a lot more of it later.

How do you intend to solve the problem of foreign workers? Is it possible to compel a citizen of Kuwait to work instead of a foreign worker, say, as a cleaner?

Before oil was found in Kuwait, our people worked everywhere. We cannot completely discontinue the use of foreign labor. This is not possible anywhere in our global world. But we can replace ten unskilled cleaners with one equipped with modern technology and able to manage it. We should attract a skilled labor force.

Against the background of our own population growth, an uncontrolled influx of immigrants entails a lot of problems. This includes traffic jams, which are a big problem for Kuwait, just like everywhere else; and it also means pollution, a decrease in our cultural level, a lack or reduction of public health services and so on.

Do you agree that many of Kuwait’s problems are caused by oil resources?

There is such a term as “oil disease”; it is also called “the Dutch disease”. Yes, oil dependence is a problem for Kuwait. And here is another danger, I mean populist demands. Some people want this wealth to be spent here and now on the needs of specific groups. But the government should be wiser; it must look forward, and think about the future. Democracy must be responsible. We can meet the populist demands now, but thus destroy our future. And here we should also look for mutually acceptable solutions. You know that for many years Kuwait has been sending a part of the oil export revenues to the Fund of Future Generations. Now, if formerly it was 10% of the oil income, then, since the beginning of 2011, it was decided to send 25% of oil the income annually. And we explain to our citizens: these funds are for our descendants. By the way, our budget is completely transparent, that cannot be said about every state. Corresponding figures are regularly published on the Internet, including the studies of the International Monetary Fund.

But isn’t it better, from the marketing point of view, to put this money into circulation?

But they are put into operation. These funds are not kept in the form of bonds or securities. The Fund of Future Generations’ money does work. Basically, it's invested in reliable long-term projects, mostly abroad and in industrialized countries. While solving the problems of the day, we must always remember about the responsibility for our common future.

Dipetik dari - Voice Of Russia

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