Kuwait, which has the largest oil reserves, was stranded due to falling prices for this resource.
The article notes that oil and gas exports from the Middle Eastern monarchy will fall to almost half of the 2014 highs this year. The government has almost exhausted its liquid assets, which makes it unable to cover the budget deficit. It is expected to reach nearly $ 46 billion.
Also, the situation in Kuwait is complicated by the confrontation between the Parliament and the government, whose Prime Minister is appointed by the Emir. Lawmakers thwarted the government’s plans to redistribute state subsidies and issue public debt.
The OPEC club of petroleum exporters has restored the price of hydrocarbons after a historical fall, but $ 40 per barrel is still too low. The coronavirus pandemic and the switch to renewable energy sources threaten to make energy cheap.
Kuwait still relies 90 percent on oil revenues. The state employs 80 percent of the country’s non-disabled residents, who earn more than their counterparts in the private sector. Housing, fuel, and food allowances can reach two thousand dollars a month for the average family. Salaries and subsidies account for three-quarters of the state’s spending, which is heading for its seventh consecutive budget deficit since the fall in oil prices in 2014.