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SUSTAINABILITY, KUWAIT SOCIETY, PROGRESS TOWARDS DEMOCRACY, LIBERAL EDUCATION SIDELINED DUE TO IMTERMEDIARY WASTA

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SUSTAINABILITY, KUWAIT SOCIETY, PROGRESS TOWARDS DEMOCRACY, LIBERAL EDUCATION SIDELINED DUE TO IMTERMEDIARY WASTA By Kevin Stoda

On 5th of June 2007, one of Kuwait's English language papers trumpeted the following headline: "Country's Assets top $200 Billion".[1] The article noted that this was the highest level of fiscal assets in the history of the nation. Of these moneys, $161 billion was placed in the nation's Kuwait Fund for Future Generations (KFFG). The KFFG is a fund set up for investment mostly in North America and Europe. The KFFG is wholly funded by national revenue. By Kuwaiti law, in a very forward thinking policy, ten percent of the Kuwait nation's total annual revenue is allocated to the Kuwait Fund for Future Generations.

The surprising thing about the KFFG is not necessarily that its total value in money has risen by 300% over the past five years. After all, the tiny nation holds approximately 10% of the world's known oil reserves. This lack of surprise is also due to the fact that oil prices have tripled and nearly quadrupled in almost the same 5 to 7 year period. Therefore, since Kuwait earns most of its national income from oil revenues, a three-fold rise in the value of the KFFG is not so amazing. The surprising thing is that the KFFG has not done even better than a three-fold rise over the past decade.

One reason for the lack of greater earnings by the KFFG (beyond the increased annual deposits of oil revenues) is the fact that it owns a great deal of property, especially in North America. The U.S. property sector busted its bubble a few years back and has not yet recovered. Also, stock growth and long term investments in North America and elsewhere took a huge severe dip in 2000, and despite the hoopla on the Dow Jones and elsewhere, earnings for the KFFG have not matched the growth of many smaller funds, which are not so conservative and pro-western in their investment strategies, around the world.

From a global perspective, it is certainly not clear why the Kuwaiti government doesn't significantly diversify its KFFG related holdings, especially when the shareholders or beneficiaries are the future Kuwait people. Kuwait is after all in Asia, and investment in Asia should be much higher than it has been to date. All in all, this shortsighted focus on older markets is just another manifestation of a Kuwait's habit of being behind the learning curve in the world economic and political economic development sectors.

Still more amazingly, the Kuwait government has placed the entire $161 billion in funds, which is currently set aside for future generations of its citizens, in only two separate or distinctly managed funds. This lack of fund options explored and invested in by the Kuwait government and peoples through the KFFG is certainly astounding as typically even medium-sized fund managers in the USA--like Topeka's Kansas Security Benefit--offer, manage, and divide client investments & assets in nearly 25 different funds.

Also, simmering below the surface of this KFFG underachievement is history or tradition of elitism, cronyism and a concept called "wasta" which dictates transactions all over Kuwait today and will sadly continue do so into the decades to come.

THE WASTA FACTOR

For the majority of Kuwait's citizens there is little day-to-day concern about what is happening with their great-grand children's future moneys. Occasionally, there will be an editorial diatribe concerning the shortsighted focus of the KFFG in one of the local newspapers. On the one hand, Kuwaitis know that as a society they are, in fact, wisely setting aside billions of dollars a year for the time when oil is no longer pumped from the desert floor below their feet. On the other hand, they are also certainly aware that as a nation then they are supposed to be investing wisely in their offspring's own offspring.

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Finally, Kuwaitis can smugly note that they are saving and investing much more of their current savings per capita than most other peoples and nation's are. Kuwaitis enjoy a paternalistic relationship with their government traditionally and expect the state to take care of the future while they enjoy the present. Therefore, they have historically been prepared to allow the father figure of a state provide a substantial cradle to grave existence for each citizen over the past 50 years.

Meanwhile, Kuwaitis are constantly trying to seek a balance between tradition and modernity. In only this way, they believe, can Kuwait make the world they and their ancestors have created sustainable in the face of a global economy and other spin-offs of globalized political developments. Kuwaitis thus focus more on traditional supports for the perpetuation of their society on a daily basis, like:

(a) The phenomena of "wasta" and how one can get a job for one's children in the government or in the oil sector, or simply

(b) which name-brand garment of clothing to buy today or which new car to buy and trade-in for this year.

Note: "Wasta" is the Gulf Arabic term for the use of an intermediary in society to obtain some desired end, such as a special favor, a good grade for a university class, special treatment from authorities and police, or even a good job for one's relative.

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Naturally, this concept of "wasta" is not unknown in other cultures on the planet. In most countries, it is not considered a form of bribery or fraud. However, in other societies, such intervention is, in fact, considered more than out-of-place-except by the most elite members in any society who have always had such connections and have historically used them. In short, in Kuwait, with its extreme form of "wasta" oriented elitism and focus on a family's name, no Arab character in the tradition of Paris Hilton's develops and has their photo and jail sentences run across tabloids in the region week after week.

On the other hand, in the USA everyone is aware that the current President of the United State's father, George Herbert Walker Bush through direct and indirect "wasta" got his son-now President George W. Bush, the younger-out of a lot of trouble with the National Guard in the early 1970s during the Vietnam War. This is one of the many reasons that the royal families in the Gulf Arab states and many Gulf citizens, such as those in Kuwait, hit it off so well with the Bush family and their entourage of businessmen, spin doctors, and politicians.

Moreover, having such personal connections proves beneficial for about everyone as it is certainly true that as imperfect and prone to sin and mistakes as humans are, everyone on the planet has likely had either (1) the need for or (2) desire for using such connections to gain an advantage or to get oneself out of a jam. For example, even the best parent and policeman, might need to bail his normally law-abiding son out of jail or out of a legal jam on some occasion.

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http://eslkevin.wordpress.com/2009/07/09/3-big-paradigms-hol

KEVIN STODA-has been blessed to have either traveled in or worked in nearly 100 countries on five continents over the past two and a half decades.--He sees himself as a peace educator and have been-- a promoter of good economic and social development--making-him an enemy of my homelands humongous DEFENSE SPENDING and its focus on using weapons to try and solve global (more...)
 

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