|Kuwaitis Queue and Wait|
|Key Words||Oil Prices, Revenues, Inflation, Stock Market, Deficit, Income Tax, Interest Rate, Waiting List, Charges, Price|
Kuwait, located on the Persian Gulf, has the fourth-largest oil reserves in the world. Oil prices tumbled from $26 a barrel in January 1997 to below $12 in late 1998, although they have recovered to $15 a barrel now. Oil revenues have fallen over 50 percent. U.S. inflation is lower due to the oil price plunge.
Life in Kuwait is heavily dependent on oil revenues. The stock market has fallen. Oil producers have gone out of business, merged, or laid people off. The government is running a deficit, and the social services and entitlements provided by the government are becoming endangered. Currently, health care and education are free, electricity and water are nearly free, jobs with the government are virtually guaranteed, there is no income tax, and mortgages up to $220,000 are free or are provided at a low interest rate. But there is now a waiting list of 45,000 for housing, new construction projects have been cut back, and charges for driver's and business licenses have been introduced.
Increasing the price of gasoline from 40 cents to 60 cents a gallon has been debated, but there is concern for the effect on the five-car family. There is also discussion about allowing foreign oil companies into the country once more to engage in exploration and development, and to inspire innovation and reduce costs.
(Updated June 1, 1999)
|Source||David J. Lynch, "Pampered Kuwaitis in for rude awakening", USA Today, March 22, 1999.|
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