We often hear the saying: “Perhaps a harm brings benefit.” Yet the question remains suspended between what certain groups understand as harm or not, and whether those groups were truly empowered or merely imagined they were empowered, benefiting at the expense of a “decline” that nearly carried us into a stage of “collapse.” If that is so, then they may understand and interpret it as they wish, while we retain the right to believe that every reform has a cost whose value depends on the existence of strategies that determine whether it is worthwhile. And since one thing calls another to mind, it must be said: “Perhaps a cost brings benefit.”

Today, at a stage witnessing the presence of the essential requirement — the centrality of legislation — for reforming the structure of the state’s economy through a promising economic vision, we must acknowledge that reform loses its usefulness when the truth behind successive failures is not understood. We continue to live with an accumulated defect caused by repeated reliance on what are known as “quick reform” mechanisms since our earliest days. These mechanisms often come as direct reactions, without understanding their usefulness in addressing “the core defect in the state’s economy.”

There is no doubt that such mechanisms bring benefits to the “public finances of the state,” not to its “economy,” but only temporarily — unless they are firmly and effectively paired with mechanisms that take into account the broader picture of the “macro-economy of the state,” represented by a model that has lasted for more than half a century. These mechanisms may be called mechanisms for “reforming the economic model.” They are concerned with moving the state’s economy — in both its public and private sectors — from an economy based on oil export revenues, rentier in nature and consuming the state’s natural resources, into a self-standing, productive, and sustainable economy.

Accordingly, instead of “quick reform” mechanisms serving as a “temporary” source of funding for the state’s general budget, they should become a tool for financing mechanisms of “economic model reform,” which are concerned with economic expansion that will benefit the state’s public finances, but in a “permanent” manner. The working mechanisms to achieve this must be defined, time-bound, and based on strategic objectives that are effective in achieving a promising vision, in the hope of beginning their implementation before the national economy enters the stage of “no return.”

The Core Defect

It has become clear to all that economic actors only address the economic danger when the price of a barrel of oil falls below the budget’s break-even price, because oil revenues — which constitute nearly 90% of total revenues — fall below total expenditures, while those expenditures are “continuously rising in an exponential pattern” every year as a result of the government’s constitutional obligation to provide the necessities of life for citizens.

From here, we find that the Presidency of the Council of Ministers faces two fundamental dilemmas, which can only be resolved through:

1 - Raising the share of non-oil revenues in total revenues, represented by an increase in the value of those revenues, not by a decrease in their oil-based counterpart.

2 - Reducing the rate of increase in the cost of the constitutional obligation to provide the necessities of life for citizens, meaning reducing the rate of increase in salaries and subsidies.

Here, some mechanisms that may temporarily resolve these two dilemmas in the short term could distort their permanent resolution in the long term if they are detached from reforms that correspond to the true core defect in the state’s economy. Such mechanisms will raise non-oil revenues, but their main source will still be those oil revenues that passed through wealth distribution mechanisms, such as salaries of state employees, citizen subsidies, and private-sector practices and tenders; then redistributed as profits and employee salaries, whether to citizens who directed them toward consumption or to expatriates who transferred the greater part of their shares abroad.

Therefore, the real defect in the state’s economy concerns its model, and lies in:

1 - The continued nature of the Kuwaiti economy as a “closed” economy based on oil export revenues. The greater defect is adopting solutions in which oil revenues directly or indirectly fund those non-oil revenues through the mechanisms mentioned above.

2 - The continued absence of incentives for the private sector to become an open market that contributes effectively to the gross domestic product equation through the factor of “export output” and the factor of “investment,” rather than through the factor of “consumption” and the factor of “government spending,” as has been the case for more than half a century.

Economic Recommendations

In conjunction with “quick reform” mechanisms, and in order to achieve the desired goal of improving the state’s public finances in the long term, not merely the short term, and to strengthen the Kuwaiti economy so it becomes productive and sustainable, we present the following recommendations in support of the government’s direction toward enabling the effectiveness of economic reform:

1 - Legislation related to “quick reform” mechanisms should serve only as a source of funding and stimulus for mechanisms of “economic model reform,” without supporting the general budget at the expense of applying those mechanisms of economic model reform.

2 - Work should begin on legislating a decree-law establishing the “Authority for Enhancing Non-Oil Export Output in the Private Sector,” as an authority funded by its tax revenues from the private sector, which must contribute to the continuity of a healthy economy in order to ensure the continuity of both its private and public entities. These revenues should finance incentives for the private sector’s role in the “export output” factor and the “investment” factor, so as to regulate the “consumption” factor and the “government spending” factor in the GDP equation.

3 - Legislation should be distinguished by allocating its financing to non-oil revenues without any connection whatsoever to oil revenues, whether direct or indirect, provided that the source of funding is the expansion of the private sector as a result of its expanded role in the “export output” factor and the “investment” factor in the GDP equation.

4 - Legislation should require that the reduction of unemployment and the reduction of the salary-bill burden occur as a result, not as a tool, of private-sector expansion born from stimulating the “export output” factor and the “investment” factor in the GDP equation.

5 - A team should be formed to prepare and draw the details of a promising vision, with effective objectives and strategies capable of “reforming the economic model,” and to work on the necessary legislation aimed at expanding the economy, not shrinking it. This should move the labor market toward an open market that considers only the “export output” factor and the “investment” factor, thereby generating, through its taxes, non-oil revenues for the state’s general budget, without the slightest connection to oil revenues.

O Allah, ordain for this nation a matter of right guidance.

Why can fiscal sustainability not be separated from the factor of incentives?

Sustainability is not secured by revenue size alone; it depends on turning resources into renewable financial capacity while controlling recurring obligations. From the angle of incentives, the issue is not measured by its label alone, but by the measurable effect it leaves behind.

How does fiscal reforms as tools for deeper economic reform affect Kuwait?

Its effect appears in how costs, incentives, and resources are managed, and in Kuwait's ability to turn decisions into sustainable value. The direct context is to turn quick fiscal reforms into funding tools for deeper reform of Kuwait’s economic model, exports, and investment.

Why can public spending not be separated from the factor of incentives?

Productive spending adds capacity or productivity, while spending that repeats obligations expands the burden without building new income. From the angle of incentives, the issue is not measured by its label alone, but by the measurable effect it leaves behind.

Why can public obligations not be separated from the factor of incentives?

A state’s financial strength weakens as fixed obligations expand, because the room for reform narrows even when revenues appear large. From the angle of incentives, the issue is not measured by its label alone, but by the measurable effect it leaves behind.