A budget crisis driven by low oil-prices and government inaction targets powerless expats as the culprit for Kuwait’s woes.
Rabat – Expats in Kuwait are facing a purge amid a national budget deficit and a contentious election campaign.
The parliamentary election campaign is in full swing in Kuwait. Candidates are staking their claims and lambasting endemic corruption in government. The campaign is an unusual one as COVID-19 has led the government to impose hefty fines and even prison sentences for holding or attending political rallies.
The country’s parliamentary December 5 elections feature 395 candidates running for the 50 seats in parliament, with only 567,694 registered voters out of a population of over 4 million.
Politicians know to stay clear from imposing taxes or cutting the country’s generous subsidies. Former Finance Minister Mariam al-Aqeel discovered this in February when she had to resign after she suggested increasing taxes and slashing salaries. Yet for the first time in Kuwait’s history, oil revenues will not cover public sector salaries and public subsidies.
Budget deficit
Kuwait is facing an ever growing national budget deficit which has become a central theme in the upcoming elections. Candidates point to corruption and mismanagement as the source for the growing budget gap. In reality the budget deficit appears to have more to do with pervasive wishful thinking during the formation of the 2020 national budget.
Kuwaiti officials had expected oil prices to hover around $86 dollar per barrel, and prepared the national budget based on expected state oil revenues that never materialized. With oil prices around $40, the government is seeing an ever widening budget deficit as incomes do not match expenses.
While other Gulf countries dealt with such deficits by increasing borrowing, cutting subsidies, and taxing the population, wealthy Kuwait avoided any drastic measures. While the country has over half a trillion dollars in its sovereign wealth fund, a deficit crisis looms on the horizon.
Political games
Politicians are claiming a lack of reform, the voting system, corruption, and government mismanagement are to blame. Yet, absent in the conversation are the potential victims of the country’s crisis, its large population of expats. Native Kuwaitis make up only 30% of the population, with the other 70% consisting of expats, many from South Asia, who work in essential lower and medium wage jobs.
Kuwait’s politicians appear to have taken a page out of the book of European xenophobic politics. Politicians, public commentators, and journalists have blamed the country’s immigrants for anything from corruption to the spread of COVID-19. Xenophobia against expats has become so common in Kuwait that even the UN is worried about the problematic rhetoric.
While Kuwait’s political class bickers about who is to blame for the country’s economic issues, many expats are preparing to leave the country they considered home for decades. All expats over the age of 60 who do not hold a university degree will not see their residence permits renewed in 2021. The new policy alone is set to deport thousands of expats from Kuwait.
Plight of expats
Amid the misdirected fears of the primarily wealthy native population, a true crisis is emerging for Kuwait’s powerless expats. Yet, the plight of immigrants is not up for debate in the Kuwaiti elections. Elite politicians appear to have learned from Europe’s xenophobes that blaming powerless immigrants is an effective tactic to divert blame from themselves.
“Demographic imbalance” has become the politically correct term those practicing xenophobic politics that scapegoat Kuwait’s important expats prefer to use. Expats have suffered more from the economic fallout of COVID-19 than native Kuwaitis, yet the country’s elite present them as a cause of the problem. Despite local xenophobia, Kuwait continues to depend heavily on expat labor.
While Kuwait provides 90% of native citizens with subsidies and well-paid jobs in the public sector, expats are increasingly seen as an expendable drain on the economy. The government will likely soon be unable to pay public sector salaries. The empty solution it offers is to block expats from Kuwait’s public sector all together.
The government is even draining the relatively poor expat community of funds to fill up budget gaps. The country offered a one-month amnesty to roughly 150,000 expats to renew their expired documents, on the condition that they pay heavy fines. Policies such as Kuwait’s “Foreign Residency Bill” aim to either deport or profit from expats.
