Y. Al Jalal, July 2020. Shuwaikh Economic Office
Abstract. A triad of poor circumstances and fiscal strains have shed light on the Kuwait government’s management of public finances. This research paper investigates the closing accounts and budgets from 2010-2020. It reveals two concerns in the budget balance: 1) significant exposure of oil revenues to oil prices and 2) inflexible and high-consuming government expenditures. From this, it builds on the IMF staff’s 2020 survey on Kuwait, which describes the urgent need for a rules-based fiscal framework to guide financial management. However, the IMF report cites societal preference as the chief obstacle against the adoption of fiscal rules. Empirical research on national management of finances compared with examples from other oil-exporting nations highlight the need for both rules and more importantly, fiscal reforms. This paper concludes that reforms must focus on diversifying revenues while ensuring the efficiency and optimisation of public expenditure.