x Abu Dhabi, UAEThursday 18 January 2018

Kuwaitis happy with emir's 1,000-dinar gift but still waiting for a plan

Kuwait at 50: The 1,000 dinar a head giveaway in Kuwait from the emir as part of the Liberation Day celebrations this year means a family with six children will receive more than Dh100,000 . But while Kuwaitis are glad to have that, many believe the country's economy has failed to keep up with its GCC neighbours in terms of infrastructure and investment, and are looking to see their government start building new schools and new hospitals.

A family spends a portion of their grant from the emir on Wednesday at an electronics store in Salmiya, Kuwait.
A family spends a portion of their grant from the emir on Wednesday at an electronics store in Salmiya, Kuwait.

KUWAIT CITY// A gift from the emir has given all Kuwaitis more to celebrate than the country's 50th anniversary of independence from the United Kingdom today.

"We stay in Kuwait for the celebration every year, but it's even better this year; it's Liberation Day plus 1,000 KD [Dh13,155]," said Ali Jawad, a mechanical engineering student, as he shopped for a new television in the Electrozan electronics store in Salmiya this week.

"I was going to go to Barcelona and Madrid to watch football, but my wife doesn't like sport, she loves to shop, so we're going to London instead, and I'm also going to buy a television," Mr Jawad said. "It's a gift; you should enjoy it."

Sceptics say "the gift" comes at a convenient time to placate the population when unrest is spreading in the region, but the practice has a much longer tradition in Kuwait. Emiri grants are just one of the methods employed by the rulers to distribute the state's prodigious oil wealth.

The electronics shop's tills were busy checking out plasma televisions, digital cameras and kitchen appliances. It is a scene that is being repeated in shops all over the country. This week, every Kuwaiti man, woman and child were gifted 1,000 Kuwaiti dinars  from the emir to celebrate National Day, Liberation Day and the emir's coming to power.

Hamad al Turkait, 24, a Shuaiba Port employee who was carrying a new laptop and camera, said: "It's a large amount, it's very good. It's more than my monthly salary."

"The money has helped people with loans to pay off their debt and others to build extensions to their houses. My friend and his wife have six children, they're going to buy a Chevy Tahoe with the 8,000 dinars," Mr al Turkait said. "It's right that we should get gifts now and then, because we have so much oil."

Citizens are entitled to free education, health care and generous pensions. A vast array of subsidies allows Kuwaitis to purchase water, electricity, petrol, material to build houses and even bread at prices well below the market value.

"It's not like the countries of Africa, where the oil rent doesn't reach the people," said Bassam Fattouh, a professor at the Oxford Institute for Energy Studies. He said even thought the systems of distribution have created inefficiencies, "it's a positive story".

Generous salaries and benefits have made jobs in the country's ministries and authorities more attractive than the private sector. Ninety one per cent of Kuwaitis work for the government. Productivity is believed to be much lower in the overstaffed public sector.

Another method the government employed to enrich its citizens from the 1950s to the 1980s was state purchase of private land at inflated prices.

Abbas al Mejren, the director of Kuwait University's energy and environment unit, said: "It's a big change in the standard of living. Though the prices went up, they are still able to afford more." He estimated that salaries have quadrupled in 30 years, giving locals twice as much spending power.

The money used by the government comes, of course, from oil. Since oil was discovered in Kuwait in 1938, it has become the world's 10th largest producer. It produced about 2.5 million barrels per day in 2009, according to the US Energy Information Administration.

"It has changed our society enormously," said Bodoor Sayed Omar, a member of Kuwait Oil Company's information team at the company's offices in Ahmadi, a city that was originally built to house British oil workers. "We're definitely a richer country. When I was younger, there wasn't as many high buildings and fancy cars."

As Kuwait's wealth increased, the benefits trickled down to the population. In 1975, the literacy rate among adults was 59.6 per cent, according to statistics from the World Bank. By 2007, this figure had increased to 94.7 per cent, one of the highest in the Arab world. Life expectancy at birth, which was just under 60 in 1961, had climbed to 78 in 2008.

Despite the improvement in living standards Kuwaitis have witnessed since independence, many believe the country's economy has failed to keep up with its neighbours. In the Gulf Co-operation Council, Kuwait is the least popular destination for foreign investment, ranked lowest in the World Bank's 2011 ease of doing business index.

"We did not have a new hospital built over the last 30 years, we are still teaching in schools that were built 40 years ago," Mr al Mejren said. "The major [infrastructure] expansion we had was in the 1970s after the oil-price increases."

The government is trying to reverse the trend with a four-year plan to boost investment in a range of sectors including transport, health care and energy.

Mr al Mejren said the economy is waiting for the government to start implementing the plan "because this is the only way to exit from the situation we are in".