Kuwait has one of the smallest recovery plans in the region (File)
The Prime Minister of Kuwait has said that the country’s expatriate population should be reduced by more than half to 30% of the total, as the coronavirus pandemic and the fall in oil prices are thrilling the economies of the Gulf.
Foreigners make up nearly 3.4 million of the 4.8 million people in Kuwait, and “we have a challenge ahead to correct this imbalance,” Sheikh Sabah Al-Khalid Al-Sabah told reporters on Wednesday. local newspapers, according to an official statement released by state-run KUNA.
These comments are a rare public acknowledgment by the executive of one of Kuwait’s most controversial issues, and follow a new desire by legislators to reduce the number of overseas workers, particularly the workforce. unskilled work, with intense economic tension. MEPs propose a quota system and the replacement of all expatriate government employees, estimated at 100,000, by Kuwaitis.
Critics of the approach point out that small groups of citizens will make it difficult to replace many foreign workers, particularly in occupations that Kuwaitis are reluctant to accept, and reduce overall consumption. On Twitter, some reacted with contempt.
“The percentage of domestic helpers alone represents more than 50% of Kuwaitis, not to mention other residents,” said Sajed Al-Abdaly, a prominent political columnist. “Some statements are impossible from the moment they are made. Your Excellency, speak to our minds so that you can help us believe the seriousness of your proposal.”
The economies of the Gulf have taken advantage of their oil wealth to increase their population with foreign workers and to build dynamic consumer societies. Saudi Arabia, along with Germany, is the second largest destination in the world for migrants, while the United Arab Emirates welcomed more migrants last year than France or Canada, according to United Nations estimates. In Kuwait, at least 650,000 expatriates, mainly from the Philippines, India, Sri Lanka and Bangladesh, are employed as domestic workers alone.
Expatriates earn better income in a low-tax environment – part of which is repatriated – but are vulnerable with few safety nets in their host country or with citizenship channels. As Gulf countries rolled out tens of billions of dollars in stimulus packages to help businesses and banks survive the slowdown triggered by Covid-19 and cheaper oil, most initiatives targeted business owners rather than the employees.
Kuwait has one of the smallest recovery plans in the region. However, the main lender, the National Bank of Kuwait SAK, forecasts that the country’s budget deficit will reach 40% of gross domestic product in the fiscal year that started on April 1, the most since the 1991 Gulf War and its aftermath. Most Gulf States are expected to run 15% to 25% deficits in economic output, leading to debt accumulation, dwindling reserves and difficult choices.
Voters question
While Kuwait has been replacing expatriates in the public sector with nationals for years, the coronavirus has accelerated its efforts. Legislative elections are scheduled for the end of this year, and anti-expatriate rhetoric is attractive to some voters, especially when it comes to lucrative government jobs. At the end of 2019, only 19% of the Kuwaiti workforce was in the private sector.
Foreigners are responsible for the majority of virus cases in Kuwait, as the disease has spread among migrant workers living in overcrowded housing. While Kuwait lifted its 24-hour curfew on Sunday, some areas remain isolated in order to stem the epidemic.
In comments to major publishers, the Prime Minister reiterated that Kuwait needs to diversify its economy away from its dependence on oil, with carbon sales representing around 90% of total government revenue.
He also said that 224 companies had been referred to prosecutors on the basis of information that they had broken the laws by exchanging residence permits, KUNA reported, referring to a practice that illegally brought workers into the country. foreigner and transfers them between employers.
“We are responsible for all those who live on this earth and the residential trade has exhausted the state,” he said, “especially in the face of the current situation.”
