Kuwait / by Alistair Galloway

The effects of the low price of oil continue to be felt in Kuwait. The government faces a budget deficit of $31 billion for the current fiscal year. Earlier in the year the government reduced fuel subsidies by up to 83 per cent which sparked public discontent. Generous government welfare for citizens in return for political legitimacy is a key part of the social contract between citizens and the state. The dissatisfaction at the cuts to fuel subsidies and the perception that they may be the first step towards greater austerity were expressed in the parliamentary elections held at the end of November. The government has seen its majority reduced to one member of parliament after the opposition and its allies captured 24 of 50 seats. The opposition is a diverse group with some common demands, primarily resisting austerity, rather than a cohesive and coordinated bloc. The Gulf Cooperation Council met at the beginning of December and shows some level of policy agreement between members in relation to the situation in Syria and Yemen but economic matters are the main focus of the council’s discussions. A woman has been jailed for 10 years for supporting the Islamic State (IS). It is believed she was planning to carry out a suicide bombing in Kuwait. A German intelligence agency report has alleged that groups within Saudi Arabia, Kuwait and Qatar have been supporting extremist Islamic groups as part of a long-term strategy to exert influence and spread the ideology. The government is making plans to sell up to $10 billion of US dollar-denominated assets to help plug the current budget deficit.

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