The only good news in sight has been the renewed willingness of the Kuwaiti Parliament to take on the elite status quo by proposing a series of anti-monopoly and anti-cartel laws. However, that promising legislation has been hung up since December 2006 and there are rumors that the Emir may call for snap elections within the next 12-months. This means that there will be a tendency for the current parliament to put these and other important legislation off until new elections have been held.
IS TRANSPARENCY A SOLUTION?
Etheridge cites local chamber of commerce officials in Kuwait implying that transparency will be sufficient to make the economies in the Gulf Arab world run much better. This will help the local governments to monitor and close down cartels as well, they say. They do not mention that some of the government members have family members who don't wish to reveal how much money is flowing in and out of their hands-and out of the hands of favored companies and cartels.
I am not sure that transparency is the panacea that it is all made up to be for the Gulf Arab economies. This comes from my observing that the country of Kuwait has had a region-leading free press for many decades. Nevertheless, Kuwait was bypassed in terms of economic efficiency well over a decade ago in economic development by younger Arab states, whom had not experienced such a free press for nearly so long a time. (These more successful upstarts include those 7 emirates that make up the United Arab Emirates in terms of economic efficiency. Meanwhile, both the Emirates and Qatar are making greater strides in developing higher education than is Kuwait or Saudi Arabia.)
More than just transparency, a nation needs leadership and the public demand to improve, i.e. common vision and hope among the populace is needed, too. One needs rigorous legislation that is enforceable and enforced. In other words, one needs enough people who are not tainted by the old-guard elite who can force a change and see it beneficial to carry out these reforms.
On the other hand, there is certainly one aspect of transparency which would really shake up the elite and provide a revolution in Kuwait. This would be to make public the earnings and wages of all the elite companies and wealthiest political elite, via some sort of enforced income tax.
If accounting books, especially at state-run firms, had to be kept more public for tax purposes, the huge black markets and shadow economies would be significantly reduced. Moreover, inefficient businesses would be seen for what they are, market losers than need to be sold off and not subsidized by banks and the economy as a whole. Moreover, international and local competitors could better see how to enter the market if accounting was much more thorough and public.
Further, bribes, abuse of connections and rank, insider deals, and stolen funds could all be reduced in the same fashion as accountability for the books and numbers could help oversight to soar.
Similarly, putting all public expenditures on-line would be helpful.
I recall that the city of Monterrey, Mexico-where I also used to work and teach-put the government's expenditure on-line in the early part of this decade. It has been beneficial in fighting corruption in that developing nation. It could do the same here in the Gulf. It helped government watchdogs in Monterrey immensely. This sort of transparency would certainly increase government accountability in spending and use of resources. It would also lead to more competitive bidding. Finally, it would lead politicians to think twice before raising certain pork barrel projects targeting a certain tribe or political elite.
In short, the elite in Kuwait have got to learn that at some point, their party will be over. However, with the Gulf Arab governments consisting of family members of many these elite or consisting of political hacks receiving benevolences from these same families, I don't see much happening from within soon in the Gulf. That is why it might seem that it would be better to focus on the abuses of China Inc., India Inc. or even American Inc. (or Japan Inc. again) in the coming decade
On the other hand, in the absence of many critical and extremely vocal Kuwaitis, non-Kuwaiti voices are needed. The non-elite Kuwaitis are already running up huge financial debts trying to half-way keep up with the monstrous wealth of the tiny elitist in-crowd that has run the land for far too long. Such groups of Kuwaitis are a divided bunch and don't have any leadership or political-economic savvy to take on the established elites.
With so many ex-pats working hard making Kuwait what it is and trying to make it better, we have got to voice our concerns and get our own WTO member governments to get Kuwait and other Gulf Arab states to play by the fair free market game-or prepare to surrender our futures to this sort of behavior more and more as the 21st century becomes the Asia century & dominated by Asian cartels from the Gulf to China or Japan-with far too little real experience in either fair or free trade.
NOTES
Etheridge, Jamie, "Gentlemen's Agreements and Developing Kuwait", FRIDAY TIMES (May 11, 2007), p. 3.
