Between a previous prediction and a present reality, unfortunately, the “Public Debt Law” comes as an unavoidable fate, caught between random reactions and influence-driven obstacles aimed at personal benefit. Today, we must all realize that our previous calls for achieving economic sustainability did not come in vain. Economic sustainability is the solution and the beginning of correcting the path, and of avoiding the beginning of the end that we see today, when applying the “Public Debt Law,” the “Law for Drawing from the Future Generations Reserve,” the “devaluation of the Kuwaiti dinar,” or all of them, has become only a matter of time. Yet hope still remains.

Between Public Debt and Future Generations

We pose this question to the honorable members of Parliament: if they do not approve the Public Debt Law, then, by the same logic, this also requires that they not approve a law allowing benefit from the Future Generations Fund. The difference between the two is that debt obliges the government to repay the borrowed amount, while drawing from the Future Generations Fund, or benefiting from the returns of its investments, does not oblige it to return the amount taken from it.

Approving a law to benefit from the Future Generations Fund is more harmful than approving the Public Debt Law, especially if we assume that members of Parliament understand that a decline in the credit rating is natural if the assets of the Future Generations Fund decrease. They should also understand that the cost of debt in the current circumstances — the health and oil crises — is lower for the state than liquidating some assets at a loss from the Future Generations Fund or the General Reserve. What, then, is the optimal solution under these current conditions?

Everyone who opposes the Public Debt Law must realize that the deficit in March 2021 is estimated at 14 billion dinars in the best-case scenario. So how does one plan to close an expected actual deficit? And if the Public Debt Law or the law to utilize the Future Generations Fund stalls, do members of Parliament know that the government apparatus will find no option before it except devaluing the Kuwaiti dinar to cover the budget deficit?

Healthy and Unhealthy Borrowing

The mechanism that achieves a sustainable increase in gross domestic product comes through investment, increasing exports, reducing imports, or both, by stimulating local industries aimed at self-sufficiency and creating external consumption.

To achieve this, a cost must be borne and a suitable environment created, whether by drawing from reserves or increasing debt. A public debt ratio estimated at 30% of GDP is considered healthy if it is employed to increase GDP annually, thereby reducing the public debt ratio in the following year relative to the rise in the new GDP. But if debt is taken at 30% without raising GDP annually, then the matter is not healthy.

The Law for the Annual Increase of Non-Oil Revenues

Kuwait’s public debt ratio stands at 18% of GDP, and fear of increasing it stems from the fact that we are not an industrial state. Therefore, once a law is enacted alongside the Public Debt Law guaranteeing an annual increase in non-oil revenues by 5% of total revenues, provided that this increase comes from taxes and fees on sectors concerned with industrial exports and their consequences, there will be a simultaneous rise in GDP. If total public debt rises and total GDP rises as well, then the public debt ratio to GDP will not increase if the rise is healthy.

The desired law would create an environment capable of accountability and course correction, due to the public’s low confidence in a clear government program for applying the correct mechanism. When the law — the annual 5% increase in non-oil revenues as a share of total revenues — is drafted with a clear methodology, a firm plan, and a decisive vision that obliges the state to raise its non-oil revenues and imposes strict penalties for non-implementation, it will force state institutions to direct their resources toward creating an industrial and economic environment that achieves production, raises export output sustainably, attracts external consumption, and is fully prepared to bear taxes and fees.

Through continuity, the cumulative increase in non-oil revenues will be achieved alongside a healthy rise in GDP. The citizen will then be assured that the matter is not merely about borrowed funds, but that the government, with all its financial and administrative resources, will dedicate its efforts toward achieving the desired objective: borrowing for investment, not consumption.

Recommendation

Projects that support economic sustainability in its true meaning ensure that we can work and consume resources without affecting the resources of future generations. Accordingly, oil revenues and oil-related projects, as well as power stations, do not support a sustainable economy, because from the standpoint of economic sustainability, they neither increase exports nor reduce imports.

Therefore, in light of the high cost of continuity during the coronavirus pandemic, the decline in the price of a barrel of oil, and the greater efficiency of the Public Debt Law compared with the law to utilize the Future Generations Reserve Fund, we recommend that members of Parliament approve the Public Debt Law on the condition of a government commitment to a law raising the share of non-oil revenues by 5% annually from total revenues, starting March 29, 2022, provided that this increase results only from growth in export output.

Allah, and the platforms of publication — newspapers and social media — bear witness that we have warned for many years that the path we are following is capable of burning through our funds and dragging us toward the condition of states whose economies collapsed completely. Yet there was no response. Specialists are marginalized as usual. The blame for that does not fall merely on doors closed by a government official or a member of Parliament; rather, it reaches and becomes rooted in a problem of an entire system that enabled them to marginalize the opinions of specialists while strengthening their benefits. What we witness today is the clearest example of the results.

Have I delivered? O Allah, bear witness.

How can fiscal sustainability move from a general idea to something measurable?

Sustainability is not secured by revenue size alone; it depends on turning resources into renewable financial capacity while controlling recurring obligations. When accountability is ignored, the idea becomes a limited procedure that does not change the wider path.

How can public spending move from a general idea to something measurable?

Productive spending adds capacity or productivity, while spending that repeats obligations expands the burden without building new income. When accountability is ignored, the idea becomes a limited procedure that does not change the wider path.

How does public debt law and non-oil revenue growth 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 approve Kuwait’s Public Debt Law only with a binding plan to grow non-oil revenues through export output and investment.

How can public obligations move from a general idea to something measurable?

A state’s financial strength weakens as fixed obligations expand, because the room for reform narrows even when revenues appear large. When accountability is ignored, the idea becomes a limited procedure that does not change the wider path.