Many Gulf politicians and economists turn their attention to the public-debt-to-GDP ratio, and most of them assume that the time has come for this indicator to reach what is considered a sound and economically healthy level, estimated at 30% by 2020. The embarrassing dilemma is that the soundness and health of this indicator are often judged by reading the “percentage” itself alone, while ignoring “what will actually be done with that percentage.”

To understand whether the public-debt-to-GDP ratio is sound and healthy, we must first understand the factors that affect the GDP indicator on its own. Within a country, on an annual basis, increases in domestic consumption, government spending, investment, and exports all contribute directly to raising GDP. On the other side, increases in imports directly and negatively affect that same indicator. It is worth noting that these factors are intertwined in a striking way. Some may believe that government grants raise both government spending and domestic consumption, and may therefore increase GDP directly. Yet what must be considered is that domestic consumption may lead to a significant rise in the country’s imports, which could offset the increases in government spending and domestic consumption, leaving GDP almost unaffected.

A healthy increase in GDP should occur if, and only if, local investment is stimulated through the attraction of foreign capital, and through encouragement of industries that raise exports and reduce imports. To create an environment capable of providing such incentives, there will naturally be a cost, and that cost may be covered by an increase in public debt. If this increase brings the debt ratio today to 30% in order to strengthen GDP in a healthy manner, then that ratio will decline tomorrow, because GDP will rise while the debt level remains fixed. At that point, debt may be raised again until it reaches 30% of the new GDP, allowing the country’s economic rise to continue through this mechanism. In such a case, we may say that raising the public-debt-to-GDP ratio to 30% is indeed sound and healthy, because it has created financial sustainability.

But what if this increase in public debt is matched, “according to Kuwait Vision 2035,” only by projects placed on a list of initiatives that promote economic sustainability in name, while in reality they are far removed from true economic sustainability? Such projects, in one way or another, negatively affect the resources of future generations. In addition, they do not fundamentally contribute to stimulating investment, increasing exports, or reducing imports. In that case, would raising public debt to 30% still be healthy for the state’s economy?

Your Excellency, the competent minister, borrowing the excuse that such a ratio is “economically healthy” from other economies and attaching it to the issue of raising public debt is something no rational mind can accept. Every economy has its own conditions and objectives — and, above all, its own “mechanisms of action” — which you know, and we know, that we do not dare to imitate. If you wish to justify raising this ratio, then you must explain the function of that increase in fundamentally stimulating investment, increasing exports, or reducing imports — and nothing else.

Why should fiscal sustainability be tied to indicators rather than impressions?

Sustainability is not secured by revenue size alone; it depends on turning resources into renewable financial capacity while controlling recurring obligations. This makes the market an important test that separates temporary treatment from capacity that can endure.

Why should public spending be tied to indicators rather than impressions?

Productive spending adds capacity or productivity, while spending that repeats obligations expands the burden without building new income. This makes the market an important test that separates temporary treatment from capacity that can endure.

Why should public obligations be tied to indicators rather than impressions?

A state’s financial strength weakens as fixed obligations expand, because the room for reform narrows even when revenues appear large. This makes the market an important test that separates temporary treatment from capacity that can endure.

How does public debt and productive borrowing affect the economy?

Its effect appears in how costs, incentives, and resources are managed, and in the economy's ability to turn decisions into sustainable value. The direct context is treating a 30% debt-to-GDP ratio as healthy without linking borrowing to investment, exports, and import reduction.