Kuwait mulls scrapping expat subsidies

Kuwaiti lawmakers have called on government to abandon subsidisation of expat water and electricity fees

A large group of Kuwaiti lawmakers are calling on the government to scrap expats’ subsidies for essential services including electricity and water, claiming the government can no longer afford them, according to Kuwait Times newspaper.

The move would increase the average electricity bill for an apartment to as much as KD100 (US$350) per month – more than the salary of many expats who work in low paid jobs, such as maids.

But eight Independent MPs claim the government is wasting KD6-12 billion each year on providing subsidized services, including fuel, electricity and water, to all Kuwaiti residents.

They want Kuwaiti nationals to receive the services free and expats to pay full price.

Expats make up about two-thirds of the oil-rich country’s 2.8 million people.

Electricity is charged at two fils per kilowatt hour, a tiny proportion of the 38 fils it costs to produce, while power prices have not increased since the mid-1960s, according to Kuwait Times.

The price of fuel also has not increased for 15 years and is one of the lowest in the GCC. The government says it spends more than KD1 billion annually in fuel subsidies.

The proposal follows a growing list of ideas from politicians targeting expats.

The government is considering increasing expats’ fees for medical services including medical checkups, surgeries and x-rays, it was revealed on Sunday.

While last month, lawmakers proposed reducing overcrowding at the country’s medical facilities by designating specific hours of the day that nationals and expats could seek medical assistance, in what some described as racist.

Under the plan, only Kuwaitis would be allowed to attend hospitals and clinics in the morning, while non-nationals would be treated only in the evening. Staff also would be segregated according to their nationality, while emergencies would be excluded from the plan.

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Posted by: Thamir Ghaslan

Why are maids being dragged into this?

Last I checked, they live at home with the family and don't pay for electricity, water, transportation, and other subsidies.

Posted by: kingkaiser

Fine, lets talk about delivery staff, office peons, janitors, etc. the point remains that a two tier system penalizes those least able to bear the financial damage.

To explain: if services are currently subsidized across the board, the government takes the damage, which you may argue is unfair. However, If you have the two tier system, what will usually happen is that the higher priced tier will subsidize the lower tier. So the janitor at a firm will be the poor guy who pays extra for healthcare so the CEO can get it for free. This to me seems even more unfair...

Personally, I support a system where those who can afford to pay should pay, and this sort of support is only for the poorest members of society, but thats another discussion entirely.

Posted by: Hams

Its about time!!

Posted by: Ahmed

All of you get a perspective on this entire issue. What is convoluting the entire discussing is the comment that only expats should pay and Kuwaitis aren't effected by the increased charges. Note that the article stipulates that, "Electricity is charged at two fils per kilowatt hour, a tiny proportion of the 38 fils it costs to produce, while power prices have not increased since the mid-1960s, according to Kuwait Times. " Since the 1960's? This government has been ineffective for decades and finally the alarm bells have gone off, so basically everyone in Kuwait has benefited for years because of government incompetence and quite frankly, the party is over. So ACROSS THE BOARD all fees should be increased in Kuwait for everyone.

Posted by: Aby

fact is making life difficult for expats is plain bloody stupid, i've made the point elsewhere that additional costs to workers will have to be absorbed by employers. People come here for the tax system, if you remove incentives and increase cost of living you discourage workers who are active in the private sector from coming here.

A lot of workers here earn a pittance and as jim pointed out low wages for maids etc is shocking. How will they afford to live here and do the work others deem to be below them (despite the fact that theres no shame in honest decent work)

A fuel duty would be more effective and fair way of raising funds and freezing state benefits would be helpful in controlling budgets. Too much instant gratification and expat bashing rather than a reasoned understanding of the consequences of silly poorly thought through policies.

Posted by: jay

well you say it simply however its a stupid statement remember we will demand higher wages to pay the amounts and it is socially destructive we the expats continue to create the budget surplus of 50 billion as yr for you so this move would increase inflation cause unrest and be divisive As more people rent from kuwaities they will find a way round it as they always do by wasta curroption etc why not tax the landlords who pay little or no tax on profits
we dont mind paying our way but fairly please a simple example is you cant drive a car unless you have a salary of 400KD+ SO WHY NOT ADD 5 FILS TO PETROL PRICES how much would that raise its easier to manage and affects only those who can pay but would raise billions lets have a real debate and not a knee jerk reaction

Posted by: Paul

What next ? legalize slavery as well ? its not like any expatriate worker in Kuwait is getting a free ride for anything. Discrimination and segregation are already practiced unofficially with reserved hours for several service such as annual auto registration. Instead of encouraging segregation a discrimination the path to the future is integration. Leveraging the skills and loyalty of guest workers in building the nation will go much further than finding more ways to make them feel unwanted.

Posted by: Ahmed

This is a dysfunctional government who recently reported a budget surplus of 56.7 bn, yet are not able to pay salaries to any Kuwait Airways staff next month. I agree that the price of subsidized gas and electricity does not reflect the costs in modern day Kuwait, however, to analyze this country demographically, the majority of the subsidized costs are incurred by the Kuwaitis, not expats. The majority of the workforce is blue collar workers who live in labour camps where the costs are incurred by the Kuwaiti owners, so apart from the healthcare sector, I can understand across the board increase in subsidized amenities for every citizen to be beneficial to the government.

Posted by: kingkaiser

Ahmed - given that there isnt a multi-tiered price stucture, the costs are incurred by the government not the individual citizens / businesses (unlike Dubai, where the expats pay much more than locals and consequently are subsidizing them).

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