In this episode of Deera with Dr. Hessa Al-Mulla, the program hosted Abdullah Al-Salloum, economic affairs researcher, to discuss one of Kuwait’s most important economic issues: diversifying sources of income and moving beyond the rentier economic model that depends heavily on oil. The interview came at a sensitive economic moment, amid the effects of the COVID-19 pandemic, pressure on public finances, falling oil prices, and growing concerns about the sustainability of Kuwait’s fiscal model.
At the beginning of the episode, Dr. Hessa Al-Mulla asked about the importance of diversifying income sources and whether Kuwait had delayed this step for too long. Al-Salloum explained that Kuwait had reached a critical stage because of its strong dependence on oil revenues, while annual government spending remained structurally high due to the state’s obligations toward citizens, including employment and public expenditure. He noted that Kuwait had been recording budget deficits for several years, and that the pandemic increased pressure on the state budget through health spending, evacuation costs, and emergency expenses, accelerating the depletion of the General Reserve Fund.
Al-Salloum explained that Kuwait was facing three difficult choices, none of which represented a real solution: borrowing from local and international banks, withdrawing from the Future Generations Fund, or devaluing the Kuwaiti dinar against the U.S. dollar to cover domestic expenses. He argued that these options are unacceptable in principle because they do not address the root of the problem; they merely postpone it or transfer its cost to the future. For that reason, he emphasized that the true solution should have started earlier through economic diversification and by transforming Kuwait from an oil-based economy into a productive and sustainable economy.
The interview also explored why Kuwait had not moved seriously on this issue despite clear warning signs. Al-Salloum argued that the core problem lies in political and administrative decentralization, as well as the absence of a unified authority capable of leading economic transformation with clarity and continuity. He stressed that changing the country’s economic model is not the responsibility of the Minister of Finance alone, nor the Minister of State for Economic Affairs, nor the Governor of the Central Bank. Rather, it is a sovereign and strategic file that should be led by the Council of Ministers, away from political appeasement, parliamentary pressure, and short-term social demands.
The discussion also covered the impact of Kuwait’s political environment on economic reform. Al-Salloum explained that transitional political periods and upcoming elections often create pressure for political and social appeasement, increasing the cost to the state and delaying structural reform. He noted that the budget deficit and the depletion of the General Reserve Fund were not sudden surprises, but predictable outcomes that had been warned about for years. He referred to his book Kuwait of Sustainability, published in 2018 and submitted at the time to the Prime Minister, which addressed Kuwait’s fiscal path and the dangers of continued reliance on the General Reserve.
In the section on digital transformation, Dr. Hessa Al-Mulla asked whether digitization could support the diversification of income sources. Al-Salloum responded that digital transformation is important, but it is not the core solution. He described it as a technical tool that can accelerate procedures and improve administrative efficiency, but it cannot solve the problem if the economic model itself remains unchanged. The goal, he explained, is not merely to digitize procedures, but to transform the entire model from a consuming state dependent on oil revenues into a productive state based on exports, manufacturing, production, and reducing imports.
Al-Salloum stressed that employment should be a natural result of economic expansion, not a burden placed on the state. Instead of creating unnecessary institutions, authorities, or public bodies merely to absorb citizens into government jobs, Kuwait should expand the real economy so that it creates productive job opportunities for Kuwaitis and expatriates alike. In this sense, healthy employment comes from growth in GDP, higher exports, and increased productivity—not from administrative obligation alone.
In the second part of the episode, Dr. Al-Mulla asked about the economic streams Kuwait could rely on to compensate for oil. Al-Salloum emphasized that Kuwait possesses important human capital, and that national talents and minds are capable of transforming the economy when given the opportunity. However, he also pointed out that many Kuwaiti students who study abroad and return with skills and ambition often face a discouraging administrative environment. This weakens passion and innovation, turning potentially productive individuals into employees who simply complete working hours and accept a routine lifestyle.
Al-Salloum also discussed the risk of political demands to lower the retirement age. He argued that the early professional years are among the most important periods for productivity, and that losing experienced national talent too early weakens the state’s ability to benefit from its human capital. He connected this issue to populist electoral practices that offer short-term gains to voters at the expense of long-term economic sustainability.
When asked about possible economic sectors, Al-Salloum explained that Kuwait should not limit itself to one specific sector. Instead, it should support any sector capable of increasing exports or reducing imports. He mentioned restaurants, food industries, agriculture, software, investment, and attracting foreign capital as examples of sectors that could serve the national economy if properly directed. He also discussed the possibility of turning successful local restaurant concepts into exportable franchise models, rather than keeping them limited to the domestic market.
He also highlighted the role of Kuwait Flour Mills & Bakeries Company, noting that it proved its importance during major crises, including the Iraqi invasion and the COVID-19 pandemic. Al-Salloum argued that food industries and sectors that support self-sufficiency and reduce imports deserve serious support because they raise domestic output and strengthen the country’s economic security.
The episode also examined the effect of administrative bureaucracy on Kuwait’s industrial and commercial environment. Al-Salloum argued that the current environment is unhealthy because of structural flaws in the state’s administrative system. He pointed out that there are not enough incentives to reform procedures or improve government efficiency. The pandemic, he said, revealed that a small percentage of employees were able to keep many essential operations running, raising important questions about the size and actual productivity of the public administrative apparatus.
In the discussion on agricultural production, Dr. Al-Mulla noted that the pandemic revealed Kuwait’s local agricultural capacity and the high quality of some domestic production. Al-Salloum agreed, but explained that producers in various sectors often face administrative barriers and practices that prevent them from growing. He argued that certain crises, such as the onion shortage, showed the power of public pressure in moving issues forward, but also revealed the absence of an institutional economic threat that would push authorities to reform before problems occur.
In the solutions segment, Al-Salloum emphasized that the essential solution is to change the economic model of the state in a way that fits Kuwait’s political and social reality, rather than merely repeating broad slogans about income diversification. He argued that Kuwait Vision 2035, in his view, was not sufficient to achieve the required transformation because it mainly gathered existing and new projects under a timeline without addressing the political and economic roots that prevent Kuwait from becoming a true financial and commercial hub, as envisioned by the late Amir Sheikh Sabah Al-Ahmad.
This led Al-Salloum to discuss his proposal in Kuwait of Sustainability, which aims first to explain Kuwait’s political reality and then design economic solutions that can be applied within that reality without creating sudden conflict with society’s main components. He explained that transformation should not be harsh or abrupt, but should take place through a transitional phase of around 15 years, allowing society, merchants, investors, employees, and different sectors to adapt to legislative and economic changes.
Al-Salloum described the idea of dividing Kuwait economically into three conceptual stages or zones: Kuwait of the Present, Kuwait of Transition, and Kuwait of the Future. “Kuwait of the Present” represents the current economic reality. “Kuwait of Transition” would serve small investors who are capable of exporting but need government incentives. “Kuwait of the Future” would focus on attracting major investments and companies capable of manufacturing and exporting abroad, with the main goal of increasing GDP, creating jobs, and generating non-oil revenues through taxes, fees, customs duties, and the productive use of state resources.
He clarified that attracting foreign capital does not mean excluding Kuwaiti citizens. Rather, it can be part of building a stronger economy. At the same time, he emphasized that the success of Kuwaiti investors in “Kuwait of the Future” would be preferable to relying solely on foreign companies, because more of the gains would remain inside the local economy. In his view, it is in Kuwait’s interest for Kuwaiti merchants and investors to develop the ability to compete in real productive and export-oriented sectors.
On tourism, Dr. Al-Mulla asked whether it could become an important economic stream for Kuwait. Al-Salloum answered that Kuwait has some tourism potential, but its cost is high compared with industrial returns. He explained that industry, especially when export-oriented, can generate much larger economic returns than tourism in terms of scale and impact. He suggested that a smaller industrial area could potentially produce greater returns than turning large areas into tourism projects.
The episode concluded by stressing the importance of building industries that achieve both self-sufficiency and export capacity, whether in food production, medical supplies, simple consumer products, or any other sector that reduces dependence on imports. Al-Salloum explained that supporting local products should not simply mean raising customs duties on foreign goods, but rather enabling Kuwaiti producers to invest in technology, efficiency, and competitiveness so they can sell at competitive prices and reach foreign markets.
This interview provides a detailed discussion of income diversification in Kuwait, the future of the Kuwaiti economy after oil, the budget deficit, the depletion of the General Reserve Fund, the Future Generations Fund, Kuwait Vision 2035, Kuwait of Sustainability, digital transformation, industry, agriculture, small and medium enterprises, productivity, bureaucracy, administrative reform, government employment, and the shift from a rentier economy to a productive economy. It raises a central question about whether Kuwait can use its financial and political challenges as an opportunity to rebuild a more sustainable, efficient, and productive economic model.