Kuwait Stumbles Amid Critical Reform

May 28, 2016 | 13:46 GMT
Kuwait Stumbles Amid Critical Reform
Kuwait’s oil workers forced the government to bow to their demands after a three-day strike, jeopardizing critical economic reforms.

Kuwait is at the vanguard of the critical economic reforms that all Gulf states will eventually need to implement to make their governments more fiscally solvent and less reliant on oil revenues. However, to reform the economy, Kuwait must first rein in public sector wage growth -- especially in the oil sector. This has been a contentious process, however. In late April, oil workers began a strike that lasted three days, building upon earlier labor unrest among customs workers in 2011 and among downstream oil workers in 2013. After bringing union leaders in for talks, the two sides reached a deal May 23 that granted the union's demands. The outcome of the Kuwaiti strike will have ramifications across the Gulf, where other governments are facing similarly thorny issues. Despite the urgency of economic reform amid a budget shortfall, Kuwait gave in to social demands. Other Gulf nations may find themselves...

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