By B Izzak
KUWAIT: Kuwait has cut nearly a billion dinars in expenditure from its budget for the 2020/2021 fiscal year, the head of the National Assembly budgets committee said yesterday, adding workers’ rights, benefits and subsidies would not be affected. MP Adnan Abdulsamad said the state budget for the current fiscal year – which began on April 1 – projects spending at KD 21.5 billion, after cutting expenditures by over KD 945 million.
During yesterday’s session, MPs also approved the 2020/2021 budgets of 35 independent government agencies including Kuwait Petroleum Corp, as lawmakers called on the government to adopt real reforms and stop squandering of public funds.
Abdulsamad said the budget estimates revenues at KD 7.5 billion after calculating oil income at a price of $30 a barrel, which leaves a huge deficit of KD 14 billion. But he expected the deficit to be lower as oil prices have recovered. The lawmaker said cash flow in the general state reserve fund deteriorated in recent years because the government failed to take the necessary measures to rationalize spending.
He said the state reserve fund held KD 50 billion during years of surplus when oil prices remained high, but almost all the assets evaporated as the government lacked a prudent fiscal policy. Of the KD 50 billion in assets, KD 24 billion was used to meet the budget deficit in the past few years since oil prices crashed in mid-2014. The remaining cash was used for foreign aid, arms spending, paying the shortfall of the social security agency and other provisions, he said.
Last month, Finance Minister Barrak Al-Sheetan said assets in the state reserve fund had been depleted to around KD 2 billion, adding that the state won’t be able to pay wages in November. But Abdulsamad said a series of measures to create cash revenues have provided some KD 8.8 billion, which includes KD 3.7 billion after stopping the deduction in favor of the future generations fund, KD 2.5 billion generated from selling assets to the future generations fund and KD 2.6 billion from transferring profits from other government agencies.
Abdulsamad added Kuwait has not yet received $4 billion it deposited at the Egyptian Central Bank, which matured two years ago. During the debate, MPs called on the government to change its fiscal policy by restructuring the government administration, merging similar government bodies and rationalizing expenditures.
MP Abdullah Al-Roumi said Kuwait is passing through critical times and Kuwaiti people are looking at the prime minister to take some different actions, especially since Kuwait’s financial position is not as good as it was in the past. MP Mohammad Al-Dallal called for diversifying sources of income to reduce dependence on oil and eliminate unnecessary government agencies.