Kuwait’s Budget Reform Seen From A Different Angle

Kuwait Landscape

Kuwait’s Problem With Materialism

It’s obvious to the ~4m residents of Kuwait how much almost everyone is craving to make more money, and collect more material.

With the context of the recent harsh drop in oil prices, and the Head of State’s speech in parliament, stating that the national income is slashed by about 60%, an alarming number! It’s obvious that this hunger for fatter bank accounts, and the decline of the income will not yield a very bright future.

So where is the problem? Is it in the long list of government expenditure? The corruptive actions of the few? Or maybe the fake cancer treatments in top tier hospitals abroad that are in fact just prolonged summer holidays!

All of the above contribute to the growth of the problem, but have we ever looked at the satisfaction level of a Kuwaiti individual? And then try to connect that back to the national income and economic prosperity.

I’m going to avoid the political effects whether good or bad, and focus on the end monetary result (we’re all craving for the dinar anyways, right?!)

What do I mean by satisfaction level?

An average government employee may see his satisfaction level by the amount of bonus and salary raise he gets each year, while complaining about his job life, his never listening boss, or his long hours outside work because of no work! Or the long commute times from Mishref to Mirqab. Indeed, salary plays a role, but clearly it’s not solving the problem despite the radical irrational increases in government salaries throughout the past years. (Anyone who disagrees, please refer to the budget breakdowns and see for yourself. The numbers are freakishly huge)

Numbers Crunching Time!

Have we ever thought of traffic and its effect on GNP? Let’s take a numbers approach. Based on a 2013 statistic, a Kuwaiti national earns on average 1598 KD per month. That’s about 64 KD / working day. There are 258 thousand Kuwaiti workers in the government sector (2014 statistic). Roughly speaking, 88% of them live outside Kuwait City, that means they’d have to commute through the outrageous traffic every morning. Based on a personal time tracking, the commute takes on average 37 minutes per day. Give or take a few minutes for different towns, let’s assume a 45 minute drive per day. Crunching the numbers results in a 1.56 days spent in traffic per working month! Continuing crunching the numbers results in a 99.875 KD in unrealized losses per month per Kuwaiti national – Just because of traffic time! That’s almost 1,200 KD per year. No wonder the raises aren’t enough for the poor dude.

300 Million KDs lost per year

If we scale the numbers up, that’s about 300 million KDs per year of lost national product because of inefficient use of a citizen’s time. This isn’t only about the dinar value, it’s a major contributor to the satisfaction level of the individual, which will have a snowball effect on his productivity and sense of ownership towards his job and community.

Imagine spending that amount in putting step by step small solutions to problems like traffic, green space, better roads quality, law enforcement, cleaner buildings and the list goes on and on. Things we don’t relate to when we talk about national income and heavy expenditures and quickly turn our eyes into how we can reduce cost to survive the upcoming storm. While, if we spend intelligently in places that may seem controversial at first sight having a $45 / oil barrel, but if we deep dive into the effect of these expenses, the impact is huge. They can raise the satisfaction levels, and reduce the unrealized losses, leading to a better individual not only a fatter bank account. Then the subsequent step would be to efficiently grow our national product.

 

God bless Kuwait 🇰🇼