Discussion of economic sustainability in Kuwait is no longer an intellectual luxury exchanged in elite circles, nor a political slogan raised during seasons of speech. It has become a sovereign direction with firm pillars, one the state is working to consolidate through sound management of its resources, diversification of its income streams, and the building of an economy with strong roots, resistant to market volatility and the winds of crisis. At the heart of this path, the issue of public debt emerges not as an end sought for itself, but as a precise strategic instrument that regulates the balance of government financing and weaves the fiscal rhythm with threads of wisdom and planning, in harmony with the demands of the present and the challenges of tomorrow.

Public Debt: From Interruption to Activation

For years, the national economy continued to feel the need for a firm legal framework that would regulate the rhythm of public debt and protect it from the dangers of improvisation and uncontrolled fiscal decision-making. As challenges intensified and pressures accumulated, the Ministry of Finance submitted its recommendation to issue Decree-Law No. 60 of 2025, which was approved in March of the same year, restoring to the state the right to issue debt instruments after an interruption that had lasted for years — as though it were restoring the pulse to a vital financial artery.

The decree set the ceiling of public debt at 30 billion Kuwaiti dinars, or its equivalent in other currencies, while allowing the issuance of debt instruments with maturities extending up to half a century. This legislation came as a pillar within a broader plan to manage national liquidity, diversify financing tools, and ease pressure on the General Reserve, so resources could be directed toward infrastructure and economic development projects that place the future on firmer ground.

Only three months after the decree was issued, the government launched local bonds worth 600 million Kuwaiti dinars in June 2025, in a step carrying a clear indication that the law had entered into force and that its tools were being activated in the local market, announcing a new phase in the management of public debt.

The Debt Ceiling: Between Constraint and Flexibility

Setting a public debt ceiling is not a cold numerical decision recorded merely in accounting tables. It is a strategic tool for controlling fiscal risks and a fortress protecting the state from sliding into the abyss of excessive indebtedness. Yet tying this ceiling to a fixed number, without regard for economic fluctuations, may turn it from a protective shield into a suffocating constraint, or into a wide-open gateway to fiscal excess. Since “each situation has its proper word,” wise fiscal decisions are those that change with changing circumstances and adapt to the rhythm of the economy in its rise and retreat.

In times of inflation, a fixed ceiling becomes like a collar tightening around the neck of the economy, depriving the state of financing vital development projects, even though rising GDP may give it wider room for safe borrowing. On the other side, in times of contraction, a high fixed ceiling may become a deceptive temptation, pushing the state to expand borrowing beyond its repayment capacity, causing burdens to accumulate and weigh upon future generations.

The experiences of nations offer lessons. Greece, before its financial crisis, refused to revise its debt ceiling despite the contraction of its GDP, until it found itself burdened with debt exceeding 170% of output. By contrast, Singapore followed a wiser approach, linking the debt ceiling to a percentage of GDP and managing its indebtedness with skill and competence, even during the darkest periods of recession.

The sounder and more balanced approach is to link the public debt ceiling to a percentage of the average gross domestic product over the previous three years, provided it does not exceed 30% of it. This formula gives the ceiling a spirit of flexibility, allowing it to harmonize with the economy’s rhythm as it rises and falls, and to reflect more faithfully the state’s real repayment capacity.

If the economy prospers and its productive scope expands, the ceiling rises automatically, opening broader doors for investment and financing. If it contracts, the ceiling falls in turn, restraining any excessive expansion in borrowing and preventing a slide into debt that burdens the present and drains the future. In this way, the ceiling shifts from a rigid number into a dynamic tool that guards the state’s financial security and supports its long-term planning capacity with a steady vision and a wise hand.

If the state has a conscious intention at this stage to strengthen investment in its economy, the decree itself is capable of including phased exceptions within its articles — exceptions regulated by time and defined by clear performance measures — allowing the percentage to be raised temporarily to meet the requirements of economic advancement without compromising the strictness of fiscal discipline.

Economic Specificity and the Sustainability Equation

The Kuwaiti economy, despite its financial strength, rests in essence almost entirely on one resource: oil revenues. This makes it captive to global market fluctuations and hostage to the waves of rise and fall in oil prices. Although this resource granted the state, for many decades, a solid financial base, modern sovereign vision clearly understands that reliance on a depletable resource, however abundant it may be, does not guarantee inherited stability for future generations, nor does it build bridges of long-term security. As it is said: “Blessings rarely remain forever.” The wisdom of the present is to build tomorrow on multiple resources that ensure survival and stability no matter how circumstances change.

From here, if public debt is intended to become a firm tool supporting sustainability, it should not be measured against gross domestic product in its entirety, but only against non-oil export output and investments. This approach moves the ceiling’s measure from the space of abstract numbers into the heart of the economic diversification strategy, connecting it directly to the real economy’s ability to generate renewable resources outside the framework of black gold.

If non-oil export output — meaning non-oil exports minus non-oil imports — rises, and the scope of investments expands, the ceiling rises automatically, expressing growing financial strength and renewed economic health. If it declines, the ceiling falls, becoming an early warning bell calling for course correction before it is too late. In this way, public debt becomes a tool that stimulates growth in non-oil sectors, not merely a vessel for covering deficits. The equation ultimately yields sustainable growth in gross domestic product and opens wider doors to economic independence and financial security.

The Threefold Gains of the Proposal

Adopting this formula is not merely a technical amendment to the mechanism for calculating public debt. It is a key to three essential benefits that strengthen the pillars of the economy and push it toward broader horizons:

1 - Supporting the general budget without touching the essence of reserves, by opening the door to borrowing within safe limits that harmonize with the economy’s real productive capacity — neither excess that drains, nor restraint that obstructs growth.

2 - Strengthening credit confidence, for when investors see that public debt is tied to firm and growing productive capacities, they become reassured by the soundness of fiscal management and more willing to invest with confidence.

3 - Stimulating sources of income, because raising the borrowing ceiling becomes conditional on improving the performance of non-oil sectors. Debt then turns into a tool that pushes economic policies toward real diversification, not merely a slogan repeated.

Public debt, if well governed and carefully managed, becomes a bridge upon which the state moves from the shore of need and constraint to the land of prosperity and breadth. But if it is stripped of vision and confined to rigid numbers, it turns into a heavy burden, restricting the movement of development and draining the nation’s resources. Linking the debt ceiling to the economy’s actual capacity, especially what is achieved by non-oil exports and investments, is a strategic choice that strengthens Kuwait’s financial security and opens before it paths of real sustainability, far from the winds and storms of oil-market volatility. Allah, the Exalted, says: “And do not make your hand chained to your neck or extend it completely, lest you become blamed and insolvent” [Al-Isra: 29]. This is a Qur’anic call to balance in financial conduct, and it is the essence of what this economic approach seeks.

O Allah, ordain for this nation a matter of right guidance, in which the people of Your obedience are honored, the people of Your disobedience are guided, good is enjoined, evil is forbidden, the banner of truth is raised, the trust is preserved, wealth is protected, and blessings are directed toward what brings righteousness to the country and its people.

How does understanding the factor of the future help explain public spending?

Productive spending adds capacity or productivity, while spending that repeats obligations expands the burden without building new income. It should therefore be read through the future, cost, results, and added capacity, not through intention alone.

How does understanding the factor of the future help explain public obligations?

A state’s financial strength weakens as fixed obligations expand, because the room for reform narrows even when revenues appear large. It should therefore be read through the future, cost, results, and added capacity, not through intention alone.

How does public debt management and productive capacity 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 link Kuwait’s public debt ceiling to productive capacity, non-oil exports, and investment for sustainable fiscal policy.

How does understanding the factor of the future help explain fiscal sustainability?

Sustainability is not secured by revenue size alone; it depends on turning resources into renewable financial capacity while controlling recurring obligations. It should therefore be read through the future, cost, results, and added capacity, not through intention alone.