The private sector continues to attract non-Kuwaiti labor, while the public sector remains attractive to Kuwaiti workers in the medium term
A report prepared by the General Secretariat of Planning revealed that Kuwait spends around 80% of its total annual expenditure from the general state budget on salaries and subsidies. The report highlighted a productivity challenge due to low employee productivity and highlighted ongoing reforms aimed at converting the country’s demographic composition. The personal sector continues to attract non-Kuwaiti workers, while the public sector continues to attract Kuwaiti staff in the medium term. The report warns of imaginable shortfalls in public spending on wages and subsidies if global oil costs fall in the medium and long term. Kuwait’s progression plan includes projects to strengthen the personal sector, improve the functions of citizens and create an active local market of hard work. The cooperation of all segments of society is considered essential to implement these projects and enable the personal sector to play a more effective role in the Kuwaiti economy. Regarding the Kuwaiti economy, the report notes that Kuwait spent 80% of its total expenditure on salaries and subsidies. Public spending has experienced fluctuations in recent years, with a decline in 2020 due to the effect of the COVID-19 pandemic. Despite efforts to rationalize spending, public spending has gradually increased in 2021 and 2022 with the economic recovery. Unemployment rates in Kuwait, specifically among citizens, have sometimes been low due to the state’s guarantee of employment, specifically in the public sector. The report indicates fluctuations in unemployment rates and highlights Kuwait’s unique context compared to evolved countries.
Productivity rates have fluctuated, indicating weaknesses. The report attributes this to the huge volume of remittances from non-Kuwaiti workers. The distribution of the population has changed, with a reduction in the percentage of foreigners and an increase in the percentage of citizens. Government reforms, coupled with biometric fingerprinting and smart employee identification, have helped address demographic imbalances. The report highlights the importance of the government’s ongoing efforts to reform the demographic mix.
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