Kuwait's welfare system "unsustainable", says PM.

Position::Prime minister Jaber al Mubarak al Sabah

Last year, a successful Kuwaiti businessman explained to Pat Lancaster how he believed government subsidies should and must be cut for the good of the economy. Now Kuwait's Prime Minister has added his voice to concerns the country is squandering its' precious resources

Kuwaiti Prime Minister Jaber al Mubarak al Sabah

Kuwait's prime minister has called the oil producing nation's welfare system unsustainable and added that spending should be cut, along with consumption of its natural resources.

In some of the strongest comments yet from a senior government official on Kuwait's rising spending bill, Sheikh Jaber al-Mubarak al-Sabah said a "transformation" was needed to avoid future problems.

"The current welfare state that Kuwaitis are used to is unsustainable," he said in the introduction to a government programme sent to lawmakers ahead of the opening of parliament. "It is necessary for Kuwaiti society to transform from a consumer of the nation's resources to a producer," he added.

The International Monetary Fund (IMF) and a number of other Kuwaiti officials, including the finance minister, have repeatedly warned against rising government spending in OPEC member Kuwait, one of the world's richest nations per capita.

Government spending, it was warned, may soon exceed oil revenues.

Sheikh Jaber has previously tended to keep out of the debate, but his comments suggest the government could review the costly subsidies system, as suggested by the finance minister earlier this month.

Like other wealthy Gulf Arab countries, Kuwait (below), does not tax earnings and provides a generous welfare system for its citizens. All residents, including foreigners, benefit from subsidised petrol, cheap electricity and water, while Kuwaiti nationals get additional, extra support for housing and food.

Generous spending programmes are often cited by analysts as one of the reasons the region has largely escaped Arab Spring-style unrest, with citizens accepting some political and social curbs in return for a comfortable life. The government's four-year programme says that if spending continues to rise at the current rate, Kuwait will have a real budget deficit by 2021, something which "threatens national and social security and the stability of the country".

The government seeks to "rationalise" subsidies to make sure they reach people who need help the most, local media reports said, citing the government programme, adding that the annual subsidies bill had...

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