Treating the oil addiction in Kuwait: proposals for economic reform

In 2015, for the first time in 16 years, Kuwait reported a fiscal deficit of 2.71 billion Kuwaiti Dinars ($9.4 billion). The deficit was exacerbated by weakness in crude prices and mounting supply–demand imbalances in the global oil market. It is critical that Kuwait reacts with a fiscal contingency plan to avoid the uncertainties and volatility of depending primarily on oil to fund government activities. This paper aims to highlight the current economic condition and fiscal needs of Kuwait, as well as to propose a set of potential mitigating strategies for the government to consider.