Building the new Kuwait: Vision 2035 and the challenge of diversification

Against the backdrop of global oil price volatility, increasing budget deficits and a burgeoning unemployed youth population, Kuwait has decided to redesign its national political economy. ‘Vision 2035’ sets out an ambitious plan to diversify Kuwait’s economic base by boosting revenue beyond hydrocarbons, improving productivity of different socio-economic actors, and reducing reliance on the public sector for employment of nationals. Vision 2035 places labour market reforms, human capital advancement and a favourable business environment at the core of the country’s diversification efforts. This paper explores the key barriers to reform and the implementation of Vision 2035. It highlights how different actors have a vested interest in rent distribution, which hinders economic diversification. Disputes between the government and the National Assembly have also harmed the design of economic policies. The paper provides policy recommendations to help Kuwait meet the challenge of diversification, with particular focus on reforming the education system, introducing a universal basic income, strengthening the daʿm al-ʿamala (wage support) policy, introducing public sector employment caps and the introduction of meritocracy.