Moreover, lack of competition in the water-desalinization sector in Kuwait is costing Kuwait residents greatly in terms of inconvenience. It currently costs the government-run plants some 45 dollars a barrel to produce water. I am quite certain that if private water desalinization firms from various corners of the world were invited to open up shop and were finally given proper access to do so by the Kuwait economy, they could cut that cost of production in half within a year or two.
Certainly, petroleum and water are subsidized in Kuwait and in other gulf countries. This leads constantly to inefficiencies in conservation and urban design that will continue to hurt the land for many more decades. (Saudi Arabia is ranked even worse in this area than Kuwait.)
One final example, a metro has been needed in Kuwait since before I arrived here in January 2004. Yet, no construction has started and the usual elitist suspects (or patronage cronies in the government) will eventually get the construction contract. Similarly, in Dubai, although construction of its metro is nearing completion now, it has already taken too long and the roadways are horribly paralyzing to commute on 12 hours or more each day.
STRANGE USA AND IMF RESPONSES
Strangely, the IMF has continued to give the Gulf regions positive forecasts for 2007 and 2008 simply based upon the facts that oil prices will remain high. The IMF peculiarly "lauds the region, noting that government economic policies are 'on the right track' with many oil-exporting countries stepping up spending and upgrading infrastructure. It cites, for example, the Gulf Cooperation council (GCC) countries' plans to invest $700 billion from 2006 through 2010 to cover upgrades and development of the energy sector, infrastructure and real estate."
Rightly, Etheridge has criticized the IMF on this, "This seems all well and good-until the tenders are issued and the two same construction firms take 80 Percent of the project or until the five major hotel chains get together and agree to raise room rates by 15 percent, regardless of occupancy."
Similar to the sad lack of criticism from the IMF, the USA's leadership has been lax in the last few years in seriously castigating Kuwait and other Gulf states in their lack of seriousness in carrying out international promises and trade & tariff treaties.
For example, Kuwait and most of the other Gulf Arab states are already members of the WTO, but they have not been taking seriously the rules on business, financing, transparency, anti-monopoly legislation enforcement, and on treatment of labor. This American silence is certainly to some degree a result of the fact that the USA has its handful already with neighboring Iraq and Iran. Hence, it has apparently decided to kiss-up to the Gulf Arab state governments for the coming years. This means that American and European petroleum users will continue to support these WTO abusers with little criticism or threat of retaliation for many of their closed markets in the foreseeable future.
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.
Next Page 1 | 2 | 3 | 4 | 5 | 6
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).