COVID-19: ‘Kuwait weakest Gulf state in supporting private sector’
‘Support package launched by the Supreme Motivational Committee needs more incentives
Abu Dhabi: Kuwait emerged as the weakest GCC countries in its support to the private sector in light of the conditions of the Coronavirus pandemic, after offering only additional lending facilities without a financial stimulus plan, said Marzouq Jassem Boodai, Deputy Chairman of City Group, the largest public transport operator and warehousing services provider in Kuwait.
Boodai said, in an exclusive interview with the Kuwaiti daily newspaper Alanba, that the package launched by the Supreme Motivational Committee is “good”, but that it needs more incentives to revive the economy in the face of an unprecedented extraordinary crisis.
The stimulus measures also lacked explicit support plans for the private sector, in contrast to what happened in neighboring countries such as Saudi Arabia, UAE and Qatar, which focused on private companies, covering employee salaries, and fortifying small and medium enterprises, along with tax exemptions.
The total economic stimulus for the GCC countries to face the challenges of Coronavirus and its effects on the economy until the middle of last month amounted to about $173 billion, including $70 billion in the UAE alone, followed by Saudi Arabia with $32 billion in direct support in addition to other amounts indirectly, and Qatar with $23 billion, then Oman, Kuwait and Bahrain with $20 billion, $16.5 billion and $11.4 billion, respectively.
On whether the Kuwaiti economy has the capacity to absorb the shock of the oil price collapse and the Coronavirus crisis, Al Boodi said this depends on the timeline of the crisis, given that Kuwait fights on three fronts at the same time, on the one hand the public budget is subject to wide-ranging pressures due to the sharp declines in oil prices that deepen the financial deficit, at a time when the government was forced to approve the economic closure for about two months and this increases the costs even further on the state and the private sector. As for the third front, it relates to the emergency bill, which expands daily and will be borne by the public treasury, despite all the financial difficulties it faces in combating the repercussions of COVID-19, Boodai said.