Maroc - EURASIAREVIEW.COM - A la une - 04/Nov 00:57

Debt, Decree, And Development: Kuwait’s Unnoticed Transitions – Analysis

By Brandon Fey (FPRI) -- In recent decades, the Gulf states, namely Saudi Arabia, Qatar, and the United Arab Emirates, have adopted a distinct economic and political model that combines a level of economic openness and internationalization with strict autocratic governance and surveillance. This adaptive framework has fostered dynamic change and long-term vision, fueled by substantial energy revenues. Within the past few years, several Gulf countries have initiated elaborate capital investment plans to develop new industries and cutting-edge technology, have taken steps toward normalization with Israel, and have pursued multi-billion-dollar investments in foreign countries, including the United States. Among the Gulf countries, however, the State of Kuwait has remained a notable outlier. Kuwait possessed a comparatively peripheral role in the region: Its representative parliament and undiversified economy have placed the country on a different trajectory from its peers, as it has sought to maintain regional neutrality with limited development of non-oil industries. This distinction was evidenced by Kuwait’s absence from US President Donald Trump’s recent visit to the region in May 2025. However, Kuwait’s reputation for regional discretion and non-conformity has largely obscured recent actions by the government to restructure the political and economic composition of the country in ways that will likely have a veritable impact for decades to come. Suspension of Parliament On May 10, 2024, Kuwaiti Emir Mishal Al-Ahmad Al-Jaber Al-Sabah issued a royal decree suspending both the National Assembly of Kuwait and seven unspecified articles of the 1962 Kuwaiti Constitution, granting him complete control over the government. This decision was made only a few months after the emir was instated in December 2023, following the death of his predecessor and half-brother Emir Nawaf Al-Ahmad Al-Jaber Al-Sabah. At his swearing-in, pledged to rectify the corruption and gridlock that had plagued Nawaf since the latter took the throne in 2020, preventing his government from enacting economic reforms. Before the suspension, Mishal had already dissolved the National Assembly on February 15, 2024, citing the “breaching of constitutional principles” by members of parliament and their deliberate use of “offensive language” amid growing tensions between elected officials and his ministers. He approved a draft decree that was submitted by his cabinet on February 27, setting the date for snap parliamentary elections for April 4 of that year. Despite his hopes that the move would foster reform, a 62.1 percent voter turnout elected a parliament similar to the previous one, with the pluralistic opposition occupying twenty-nine of the fifty total seats. Frustrated with the lack of change, Mishal decided to suspend the newly elected parliament, an action he deemed necessary to “save the country and secure its highest interests,” as he blamed political gridlock for obstructing crucial economic reform and development. The emir has since been ruling Kuwait by decree, free from parliamentary restriction. Kuwait has historically championed the most representative political system among the Gulf states. Unlike other parliamentary bodies in the region that are appointed or limited to advisory power, the elected National Assembly of Kuwait can propose, amend, and pass legislation for approval by the emir. It also has the right to debate and approve the national budget, can force government ministers (including the prime minister) to appear before it through interpellation, and initiate votes of no confidence against the emir’s appointees. Throughout his tenure, the emir has exhibited frustration with the parliament’s obstruction of what he believes are essential economic reforms. For example, the National Assembly has repeatedly blocked legislation for a new public debt law since the previous one expired in 2017, preventing Kuwait from issuing sovereign debt and accessing international capital markets. This represented the end of a previous pattern of renewals to the national debt law, thus forcing the already-strained General Reserve Fund to cover deficits, limiting the potential for capital expansion. The parliament also defied the Gulf Cooperation Council (GCC) Value-Added Tax Agreement of 2017 by resisting pressure from the government and other GCC member states to institute a trade-neutralizing value-adding consumption tax, citing fears of inflation and public backlash. Other points of frustration have included the Assembly’s prevention of public-sector wage cuts and subsidy reduction, as well as parliament’s refusal to approve the emir’s Crown Prince appointees without demanding concurrent concessions. In addition, the frequent interpellations of ministers have dissuaded many from pursuing reform, thus fostering further political paralysis. This trend contributed to ten cabinet resignations and four parliamentary elections between 2020 and 2024. Mishal stated that the suspension would last for up to four years, suggesting a potential restoration of parliament and constitutional articles by May 2028. He also pledged to create a constitutional review committee within six months of the suspension to propose reforms that would be approved by a future parliament or public referendum—over a year since the suspension, no such committee has been formed. The Forgotten Gulf State Remarkably, the suspension of the elected body of what has historically been the most politically representative nation in the Persian Gulf received little international attention. The United States government has issued no official comment condemning or endorsing the emir’s actions, with one anonymous State Department official merely stating upon inquiry that the United States is “aware of the developments regarding the Kuwaiti parliament suspension and are monitoring the situation closely.” There was a similar lack of response from other GCC countries with the exception of Emirati President Mohammed bin Zayed, who reportedly praised Mishal’s actions in a private phone conversation, emphasizing the importance of government stability. Despite its role as the fifth-largest oil producer in OPEC and its possession of the world’s fourth-largest sovereign wealth fund, Kuwait has remained on the periphery of mainstream international discourse concerning the Persian Gulf for the past three decades compared to other countries in the region. Much of this discrepancy in attention can be attributed to the effects of a shift in public priorities in the country following the Iraqi invasion of 1990. Before the invasion, Kuwait’s foreign policy resembled that of its Gulf peers, championing a dynamic role in regional affairs. The country’s oil revenues and relatively liberal business climate attracted considerable foreign investment and partnerships in the private sector. Kuwait was also among the major financiers of Iraq during the Iran-Iraq War of 1980 to 1988, giving the former several billion worth of US dollars as a means of combating Iranian influence. Two years later, however, former Iraqi President Saddam Hussein would launch a devastating invasion of his previous source of war funds. The irony of indirectly funding Iraq’s invasion, coupled with the substantial cost of reconstruction, imparted a