Expats solely bearing Rising Costs in Kuwait

Year by year, the cost of living for expats in Kuwait keeps rising higher, and higher, and higher. Some price hikes are necessary given the Economic law of scarcity, however others are downright discriminatory.

When the price of foodstuffs rose, it was met with scrutiny, then acceptance as it was a necessary evil due to the current economic situation around the world (which has borne the brunt of all claims for almost anything). The government has done its best to regulate the price rises and ensure that sellers are not blindly robbing the shoppers.

That was a tough pill to swallow.

Then came the story with the sky-rocketing rents. This had expats quizzically scratching their heads and wondering, huh?

The reason being that the  Government had announced its plans to reduce the expat population to 45% (currently at 66%) in the near future (link). And yet, more and more new buildings are being erected in expat residential areas, despite the fact that if the expat population of Kuwait is reduced, there would be no tenants.

Also, despite the increase in supply of empty apartments, the price continues to rise, with a 2BDR apt going for a minimum of 230-270KD.

For those that did not study Economics,the Supply & Demand Curve

This does not make any economic sense. The supply is increasing, demand is stationary as expats will decrease, hence you shift to a new supply curve (higher up) which should equate to a decrease in the price, which is non-apparent in Kuwait.

Now, the news comes in the form of the new proposed traffic regulations to limit the number of vehicles on the roads. Who does it target? Expats.

The link is to Al-Watan Daily, it is in Arabic (link)

The gist of the proposal is as follows, for Non-Kuwaiti’s:

1) 500KD instead of 10KD: issuance fee

2) 50KD instead of 1KD: renewal fee (except for drivers by profession)

3) Car registration – 300KD instead of 10KD. Renewal of car registration 100KD instead of 10KD, and these fees increase incrementally by 100KD for every second, third car etc.

Vehicles have increased in Kuwait annually by 9%, the population increases by 2.5% and the infrastructure changes at a rate of 2.1% per annum.

The Ministry also stated that licenses issued to expats since the year 2000 is over 810,000. The valid licenses to date are 581,000. There are over 166,000 vehicles older than 10 years and still on the road, of which expats own 487,000.

Expats in Kuwait, from far and wide, are here for a single purpose: to work. There is no doubt about that. Those that work have their families here that are enrolled in schools. They pay fees like everyone else, as well as rent etc. They buy food, furniture, cars etc. just like everyone else. They visit the local hospitals and clinics when they fall ill just like everyone else.

All Gulf countries have young populations. Kuwait, Qatar, Bahrain, UAE etc. Hence the need arises for expats to fill the jobs that are not filled by citizens.

To levy higher costs on expats cuts into the savings of expats, some of whom probably will not be able to bear those costs and will be forced to leave Kuwait. It would seem that now expats are being punished for coming to Kuwait to help build it, and make it prosper. It is a joint effort, let no one misunderstand that.

Expats as well as citizens work towards a better Kuwait. Imposing restrictions on expats will deter the betterment of Kuwait in the long run.

August 2011 ( View complete archive page )

September 2011 ( View complete archive page )

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