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New policies and programs are announced constantly, while the delivery capacity of the sluggish Saudi bureaucracy continues to lag. Below the upper echelons, the Saudi state remains the deeply fragmented, bloated, and slow-moving machine that I described in my 2010 book. The government seems to have no clear strategy for reforming this bureaucracy

While space for political opposition arguably has narrowed, women will soon be allowed to drive and the religious police force that once harassed them has been almost entirely neutered. By relaxing religious controls over the public sphere, the crown prince is seeking to attract more foreign investment and facilitate diversification into tourism and entertainment

Saudi Arabia has tackled fiscal reforms more vigorously than most local and international observers expected, introducing unprecedented tax and energy price measures, including the introduction of a 5 percent value added tax, new levies on foreign workers, and increases in electricity and transport fuel prices. The government is now experimenting with new non-oil sectors with an increased sense of urgency, including information technology and defense manufacturing.

As limits on government employment kick in, young Saudis will increasingly have no choice but to seek private jobs. But they will face tough competition on the private labor market where employers have become accustomed to recruiting low-wage workers from poorer Arab and Asian countries

public sector employment remains the key means of providing income to Saudi nationals. Cheap foreign labor dominates private sector employment, thereby keeping consumer inflation at bay and business owners happy. Citizens, however, are parked in the overstaffed public sector. Out of every three jobs held by Saudis, roughly two are in government. The average ratio around the world is one in five. Public sector wages account for almost half of total government spending, among the highest shares in the world

Local economic advisors fear that the majority of private petrochemicals firms — the most developed part of Saudi industry — would lose money if prices of natural gas, their main input, increase to American levels.

Saudi wage demands will have to drop further if private job creation is to substitute for the erstwhile government employment guarantee. For the time being, private job creation has stalled as the government has pursued moderate austerity since 2015 in response to deficits and falling oil prices

The government has also underestimated how dependent private businesses are on state spending. The share of state spending in the non-oil economy is extremely high compared to other economies. Historically, almost all private sector growth has resulted from increases in public spending

As long as oil prices remain below $70 per barrel, the goal of a balanced budget will cause pain for businesses and limit private job creation. This will pose a major political challenge at a time when an estimated 200,000 Saudis are entering the labor market every year. More than 60 percent of the population is under 30, which means that the citizen labor force will grow rapidly for at least the next two decades.

It would be far more prudent to gently prepare citizens and businesses for a difficult and protracted adjustment period and to focus on a smaller number of priorities

The key structural challenge to non-oil growth is the way the Saudi government currently shares its wealth, most notably through mass public employment — an extremely expensive policy that bloats the bureaucracy, distorts labor markets, and is increasingly inequitable in an era when government jobs can no longer be guaranteed to all citizens. A stagnating economic pie that might even shrink in the coming years must be shared more equitably.

A basic income would not only guarantee a basic livelihood for all citizens, but also serve as a grand political gesture that could justify difficult public sector reforms. A universal wealth-sharing scheme would make it easier to freeze government hiring and send a clear signal that, from now on, Saudis need to seek and acquire the skills for private employment and entrepreneurship. The government could supplement this scheme by charging fees to firms that employ foreigners while subsidizing wages for citizens to fully close the wage gap between the two.

Focusing on such fundamentals might be less exciting than building new cities in the desert or launching the world’s largest-ever IPO — but they are more important for the kingdom’s economic future. No country as dependent on petroleum as Saudi Arabia has ever effectively diversified away from oil

In February, even before the coronavirus hit, the International Monetary Fund was warning Saudi Arabia and the United Arab Emirates that by 2034 they would be net debtors to the rest of the world. That prediction was based on a 2020 price of $55 per barrel. At a price of $30, that timeline will shorten. And even in the Gulf there are weak links. Bahrain avoids financial crisis only through the financial patronage of Saudi Arabia. Oman is in even worse shape. Its government debt is so heavily discounted that it may soon slip into the distressed debt category

The economic profile of the Gulf states is not, however, typical of most oil-producing states. Most have a much lower ratio of oil reserves to population. Many large oil exporters have large and rapidly growing populations that are hungry for consumption, social spending, subsidies, and investment

Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices

Ecuador is the second Latin American country after Argentina to enter technical default this year.

Populous middle-income countries that depend critically on oil are uniquely vulnerable. Iran is a special case because of the punitive sanctions regime imposed by the United States. But its neighbor Iraq, with a population of 38 million and a government budget that is 90 percent dependent on oil, will struggle to keep civil servants paid.

Algeria—with a population of 44 million and an official unemployment rate of 15 percent—depends on oil and gas imports for 85 percent of its foreign exchange revenue

The oil and gas boom of the early 2000s provided the financial foundation for the subsequent pacification of Algerian society under National Liberation Front President Abdelaziz Bouteflika. Algeria’s giant military, the basic pillar of the regime, was the chief beneficiaries of this largesse, along with its Russian arms suppliers. The country’s foreign currency reserves peaked at $200 billion in 2012. Spending this windfall on assistance programs and subsidies allowed Bouteflika’s government to survive the initial wave of protests during the Arab Spring. But with oil prices trending down, this was not a sustainable long-run course. By 2018 the government’s oil stabilization fund, which once held reserves worth more than one-third of GDP, had been depleted. Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. A strict COVID-19 lockdown is containing popular protest for now, but given that the fragile government in Algiers is now bracing for budget cuts of 30 percent, do not expect that calm to last.

Before last month’s price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds were this week trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default. Because servicing its debts requires a share of public spending six times larger than that which Angola spends on the health of its citizens, the case for doing so in the face of the COVID-19 crisis is unarguable.

Faced with the price collapse of 2020, Finance Minister Zainab Ahmed has declared that Nigeria is now in “crisis.” In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages

The price surge of the 1970s and the nationalization of the Middle East oil industry announced the definitive end of the imperial era. The 1980s saw the creation of a market-based global energy economy. The early 2000s seemed to open the door on a new age of state capitalism, in which China was the main driver of demand and titans like Saudi Aramco and Rosneft managed supply

The giants such as Saudi Arabia and Russia will exploit their muscle to survive the crisis. But the same cannot so easily be said for the weaker producers. For states such as Iraq, Algeria, and Angola, the threat is nothing short of existential.

Beijing has so far shown little interest in exploiting the crisis for debt-book diplomacy. It has signaled its willingness to cooperate with the other members of the G-20 in supporting a debt moratorium.

In a century that will be marked by climate change, how useful is it to restore profits and prosperity based on fossil fuel extraction?

The shock of the coronavirus is offering a glimpse of the future and it is harsh. The COVID-19 crisis drives home that high-cost producers are on a dangerously unsustainable path that can’t be resolved by states propping up their uncompetitive oil sectors. Even more important is the need to diversify the economies of the truly vulnerable producers in the Middle East, North Africa, sub-Saharan Africa, and Latin America.

While we may not know exactly how much Arab regimes spend on their militaries, we do know that they are among the world’s leading importers of arms—an industry rife with corruption—and the largest recipients of military aid. As SIPRI has documented, six of the top 10 importers of major arms were Arab countries, totaling nearly one-third of all global imports ($146 billion) between 2015 and 2019. In 2017—the last year for which full data are available—four of the top 10 purchasers of U.S. arms were Arab countries, and nearly one-third of all U.S. weapons sales ($36.6 billion), along with roughly $5 billion in U.S. security aid, went to Arab regimes.

When IFIs provide assistance, even emergency aid, to Arab governments, they should condition the funds on transparent budgets, including a full accounting of military expenditures

It is an anomaly of the Tunisian political scene that the UGTT’s anti-austerity position has little representation among elected politicians: the largest political groups (the Islamist Ennahda party and various offshoots of the secular-modernist Nidaa Tounes party) have backed the IMF agreement

unemployment and the proliferation of grey-sector jobs are linked to structural biases in the economy that systematically favour a small group of politically connected businesses. Measures that might address this problem include increasing access to credit for would-be entrepreneurs, changing regulations and practices within the public and banking sectors that are tilted to a narrow elite, and reducing corruption. According to Tunisians, corruption has not been reduced but only “democratised” since the revolution. Investment in infrastructure serving disadvantaged parts of the country could also help spur more inclusive growth

Since the revolution, the overarching priority of political life in Tunisia has been to seek enough stability to preserve and complete the political transition. Much has been achieved, though a few important steps (notably the establishment of a Constitutional Court) remain unfulfilled. But Tunisia has now reached a point where the greatest threat to stability is no longer political rivalries around religious identity but unmet social and economic aspirations. Until now, the country’s political parties have not organised themselves to offer distinctive and coherent visions of how Tunisia’s socio-economic development can be improved, and they are paying the price in public alienation from the entire political system

The decline in the level of consumption was not counteracted by an increase in the level of exports in goods and services. This is reflected in the value of Egyptian exports, which reached 47.45 billion USD in 2018, a decrease of 1.66 billion USD compared to 2013. Other indicators also reflect a worsening international competitive position. For example, the trade deficit ballooned from -6.34% of the GDP in 2013 to -10.45% of the GDP in 2018

the regime did not invest in the development of the manufacturing sector, and it did not lay down the foundation for sustainable, long-term economic growth

The growth of the GDP is primarily driven by government spending on mega infrastructure projects (spearheaded by the military), leading to a boom in the construction sector. Government spending is financed by a bloated public debt, the burden of which is disproportionality shouldered by the lower segments of society.

the military directly employs 19.2% of the labour force. This makes the military the second largest employer in the country, after the public sector that employs 5.6 million.

projects include much-publicised mega infrastructure projects, with dubious economic benefit, the most notable of which is the new administrative capital. The construction sector, which is closely connected to the military led projects, played an important role in generating economic growth. In 2018, it is estimated to have grown by 8.9%, making it the number one contributor to the GDP growth

growth of the GDP is not driven by a dynamic private sector, but mainly by a massive military led construction spree, and mega-infrastructure projects that have little positive impact on increasing the competitiveness of the Egyptian economy

the unemployment rate, which reached 8.1% by the first quarter of 2019, the lowest in 10 years. This drop in the level of unemployment, however, requires some additional qualification. The rate of utilization, which measures the number of workers employed for at least one hour per week as a percentage of the population, has dropped from 44.5% to 39%. This is also accompanied by a reduction in the level of workforce participation from 46.4% to 41.6%, indicating a reduction in the level of those seeking work, rather than an increase in the number of available jobs. Loss of hope should be credited with the drop in the level of unemployment, not improved economic conditions.

profits generated from business owned by the armed forces are exempt from taxation, under law 96 (2015). This means that the government is shifting the burden on the shoulders of the poor, as they finance the military construction spree, which in-turn is used to enrich the military elites and other regime insiders

as debt continues to pile up, the pressure on the poor will continue to rise, as the government continues to cut social spending. This will reduce the level of effective local demand, leading to greater pressure on the private sector. In addition, if the construction spree continues, the possibility of overcapacity and over-accumulation of capital in the construction sector becomes more prominent. In essence, a bubble that is bound to burst.

The big exception is Norway, which had the foresight to become wealthy and democratic before striking oil. As almost all the world’s untapped oil reserves now lie in the developing world, Norway is not likely to have much company

Governments often try to save for lean years by paying a portion of oil revenues into a walled-off, legally untouchable fund. Unfortunately, temptation is often more powerful than the law. Venezuela’s oil fund, for example, has been raided6 (pdf, p 16) by Hugo Chavez, dropping from $6 billion to $3 million in the last decade — during a time of record-high oil prices

Taxes create accountability — citizens want to know how the government is spending their money. Substituting oil revenues decouples government from the people

Oil-to-cash programs are essentially unconditional transfers financed by oil. They can be targeted at the poor — like the cash transfers we know — or universal. It is obviously cheaper to pay only the poor. But universality helps the second goal of oil-to-cash: creating better government. If you want citizens to become effective watchdogs, it helps to include people with clout. Governments tend not to respond to the clamors of the poor

you want people to know they are paying taxes, and know exactly how much. “That’s exactly the point,” says Moss. “It creates accountability and forces tax authorities to build a sound, transparent system.” (This is plausible, but there is no evidence either way just yet that oil-to-cash programs would lead to better governance.

Distributing oil money to citizens is a big step, and oil countries and companies have rejected much more modest ideas that might put limits on their abilities to manipulate oil revenues. One that is gradually gaining ground is the Extractive Industries Transparency Initiative13, now implemented by 37 countries. Under the EITI, oil companies disclose what they pay to governments, and governments disclose what they receive. The EITI then compares and reconciles these figures

oil-to-cash is probably easiest to do in countries just starting to exploit oil — that way there aren’t entrenched interests guarding business-as-usual

former officers occupy key government positions in charge of running the national economy

The IMF loan agreement failed to fully account for the military’s domination of the economy and the state bureaucracy

the military positioned itself as the savior of a crisis of its own creation and further squeezed its private sector competitors. Alexandria’s military governor pledged to end the sugar crisis, blaming it on greedy private merchants. Meanwhile, the Defense Ministry’s “al-Salam Company to Sell the Armed Forces’ Products” sold 3,000 tons of affordable sugar in poor neighborhoods of the city. Sugar eventually resurfaced on the market — after the military minister of supply doubled its price.

Although seeking to shrink the bureaucracy, the regime enhanced its ability to place loyalists in key positions. One article in the new legislation retained a rule from the Hosni Mubarak era by reserving the authority to appoint officials in leadership positions to the president. Sisi has energetically exploited these powers, placing an increasing number of fellow former officers in top civilian jobs in the government and the public sector as soon as they retire

In the past three years, Egypt’s president issued six decisions to raise military pensions by a total of 35 percent. Furthermore, the parliament supported a new fund to provide medical and social services to military judges

These cascading crises called for urgent poverty-alleviation efforts. The military stepped in with mega-construction projects that the government’s propaganda machine portrayed as designed to lift up the lower classes — social housing for inhabitants of slums and reclamation of new land for distribution to lower-class youths. Military contractors took charge of executing these over-ambitious projects, while the army’s Department of Morale Affairs made uplifting videos on their progress.

although the project was advertised as an initiative to support the rural poor, the reality on the ground was far different. Army soldiers confiscated the desert land of numerous farmers in Qina, a poor province in southern Egypt, which they had reclaimed and cultivated for decades. The army accused the farmers of encroachment on state property and evicted them in order to annex their land to the project. Qina’s governor, a former general, used heavy loaders to demolish farmers’ properties on 100,000 acres. Helpless civilian owners could only send complaints about the governor to Cairo’s General Authority for Agricultural Development Projects, then chaired by yet another fellow former general.

Cutting public expenditures on basic goods, for instance, didn’t stop the military from lavish spending on arms procurement. From France alone, it struck deals worth over $2 billion last March. The Defense Ministry didn’t pay for those arms from the accumulated revenue of its commercial activities, but rather took loans from French banks. The military usually insists that its lucrative commercial enterprises are aimed at securing its self-sufficiency in goods and weapons, but in this case the army didn’t pay for its large shipment from its own accounts. Rather, it asked the civilian Finance Ministry to guarantee the large loan and foot the bill if the army defaults

The decision to implement the new system was quickly reversed, however, over fears that the simmering bread crisis could provoke wider tumult. Seeking to allay citizens’ concerns that the move was a prelude to a reduction in their quotas of subsidized bread, Moselhy held a televised press conference on the day of the protests, apologizing to “all citizens who had not received bread” and asserting that their quotas would remain untouched. Promising to resolve the crisis within 48 hours, he blamed bakery owners for the crisis, hinting they were making profits off the subsidized flour they received from the government.

In the last six years, government spending on food and fuel subsidies has represented more than a quarter of annual government expenditure (more than the country spends on education and health services combined)

a thriving black market for the subsidized wheat, which is often resold by the bakeries at a profit rather than turned into bread

The real test will be the government’s ability to stave off unrest that could undermine the progress made so far. Nafaa said it is possible to quell the rising anger over soaring prices “through more equitable distribution of wealth, better communication of government policies, transparency and accountability.”

Tensions have been simmering since the pound’s depreciation — a key requirement by the International Monetary Fund for Egypt to secure a $12 billion loan needed to finance the country’s budget deficit and shore up dwindling foreign currency reserves. Economists and analysts have lauded the flotation as “a much-needed reform that would restore investors’ confidence in the economy, helping foster growth and job creation.”

shrinking middle class was already struggling with flat wages, high inflation and mounting unemployment

Sisi’s approval ratings, which according to a poll conducted in mid-December 2016 by Baseera (Egyptian Center for Public Opinion Research) fell by 50% during his second year in office

the weak currency is helping the economy by boosting exports and luring back tourists. A 25% increase in non-petroleum exports in January (compared with the same month last year), along with new loans from the IMF and other sources, is beefing up foreign currency reserves, according to The Economist. The weaker currency is also proving to be a blessing in disguise for local manufacturers as more consumers are opting to purchase local products, which are more affordable than their imported alternatives

“The patience of Egyptians is wearing thin,” Cairo University political scientist Hassan Nafaa told Al-Monitor. “Despite the economic pressures they are facing, citizens have so far restrained themselves from protesting because they are weary after two revolutions. They also fear further turmoil as they see the civil wars in some of the neighboring Arab countries. But if people are hungry and if their basic needs are not met, there is likely to be another rebellion,” he warned, adding that if that happens, “It would be messy and bloody.”

“The government must also ease the crackdown on dissent, release detainees who have not committed terror crimes and bring more youths on board,”

On Thursday, Oman’s Health Ministry announced 636 new coronavirus cases, 291 of which were foreigners. The total number of infections now stands at 9,009 with a death toll of 40. 

"The weakened economy is hurting ordinary people too and a quick and brutal subsidies slash would serve to fuel discontent,"

in western economies, low-cost migrant workers are largely unavailable. When the economy booms, wages rise, forcing managers to think judiciously about hiring. During a recession, employment protections for citizens mean that redundancies are complicated and sometimes impossible. Consequently, managers focus a lot more on maximizing worker productivity through investments and employee training; and on developing new technologies that are commercially valuable.

the Gulf countries rank below every region in the world in terms of R&D spending as a percentage of GDP, and the limited spending is almost exclusively funded by the government, and occurs in governmental organizations, such as oil giants Aramco and ADNOC.

the fundamental error made by proponents of restrictions on migrant workers. Rather than making the case I made above, they make the erroneous claim that if Saudi Arabia bans migrant workers, Saudi businesses will hire nationals in their stead. We know that this is false empirically because all of the Gulf countries have tried this and it has failed. The failure was also expected because national and migrant workers are imperfect substitutes. It is tempting to attribute the attractiveness of migrant workers merely to their willingness to work for a lower wage, or to domestic businesses “lacking patriotism”; but this belies the genuine superiority of migrant workers in many relevant domains, including work ethic, willingness to perform jobs that locals are averse to (waiting tables, collecting refuse, etc.), and their possession of skills that nationals often lack.

Saudis are too often educated in the areas that help one get a cushy public sector job, and not in those that serve the private sector needs. This is most starkly seen in the limited success of vocational training, especially when compared to advanced economies such as Germany or Switzerland.

for crude restrictions on the employment of migrant workers to create jobs for Saudi citizens, they must be accompanied by upgrades to the human capital of Saudis that attend to the needs of the private sector

while the new system makes hiring foreign workers “instant”, the results of these comprehensive reforms will be anything but “instant”, requiring many years to bear fruit

analysts expect oil prices to remain below $40 for the foreseeable future, while the national budget balance requires $80-85 a barrel. The future of the oil market is getting worse, since the June contracts collapsed by more than 45 percent.

oil war is urging the Saudi government to limit or, even, cancel its excess spending and yet, the government chooses to increase public spending to support its citizens and residences.

the coronavirus might serve as a vehicle of legitimacy for the absolute monarchy that takes responsibility for its citizens as democracies are struggling to help their own.

“A youth bulge is coming into the labour force at a time when the ability of Gulf societies to continue in the traditional pattern of offering public-sector jobs is diminished,”

In 2019, the World Bank estimated Oman’s youth unemployment rate at 49 percent. The pandemic has almost surely worsened it

Muscat is seeking to improve education and diversify the country’s economy by promoting job growth in sectors like tourism, manufacturing and technology

Like Oman, Saudi Arabia faces an acute problem of creating jobs for young people. Half the population is under the age of 25 and nearly 60 percent of unemployed people are under the age of 30

Oman is a country of just five million, with expats accounting for more than 38 percent of the population. Filling the roughly 80 percent of jobs held by foreigners in the private sector is critical to the government’s economic transformation plans

Muscat has recently passed laws making it more costly to hire foreign workers while also implementing nationwide training programmes to address skills gaps with Omani nationals

A demographic that has been more willing to take jobs in the private sector, particularly in Saudi Arabia, is young women

According to Bloomberg, Saudi officials project the Line will cost around $100-$200 billion of the $500 billion planned to be spent on Neom and will have a population of 1 million with 380,000 jobs by the year 2030. It will have one of the biggest airports in the world for some reason, which seems like a strange addition to a supposedly climate-friendly city.

The site also makes numerous hand wavy and vaguely menacing claims, including that “all businesses and communities” will have “over 90%” of their data processed by AI and robots:

Don’t pay attention to Saudi war crimes in Yemen, the prince’s brutal crackdowns on dissent, the hit squad that tortured journalist Jamal Khashoggi to death, and the other habitual human rights abuses that allow the Saudi monarchy to remain in power. Also, ignore that obstacles facing Neom include budgetary constraints, the forced eviction of tens of thousands of existing residents such as the Huwaitat tribe, coronavirus and oil shock, investor flight over human rights concerns, and the lingering questions of whether the whole project is a distraction from pressing domestic issues and/or a mirage conjured up by consulting firms pandering to the crown prince’s ego and hungry for lucrative fees. Nevermind you that there are numerous ways we could ensure the cities people already live in are prepared for climate change rather than blowing billions of dollars on a vanity project.

fallout from the corruption cases overshadowed much of the final year of Emir Sabah’s life and has continued to loom over the opening months of the rule of Emir Nawaf al-Ahmad Al Sabah. The allegations, including one linked to the explosive fallout from the 1Malaysia Development Berhad (1MDB) scandal and another over $789 million said to have gone missing from the Army Fund, have implicated members of the ruling family and senior officials and further sapped public trust. In a move unprecedented for Kuwait, the former prime minister, Sheikh Jaber Al-Mubarak, was detained in April 2021, as was Sheikh Khalid al-Jarrah Al Sabah, a former Defense (2013-17) and Interior (2017-19) minister. A leaked court document also indicated that Sheikh Jaber had repaid $180.7 million in funds that prosecutors had accused him of misappropriating

the fact that the Al Sabah quickly cohered around the choice of Sheikh Mishaal as crown prince in 2020 has only delayed the moment when the ruling family must identify a next generation of leadership to eventually take over from Emir Nawaf, who is 84, and Crown Prince Mishaal, who is 80

only transitioned from one generation to another twice in the past century, in 1921 and again in 1977

Sheikh Mishaal has become important, creating a National Security Council, under his leadership, in March 2021 and visiting Saudi Arabia at the end of May. Ties between Saudi Arabia and Kuwait had been strained by the prolonged shutdown of two oil fields in the Neutral Zone along their border and by a visit by Crown Prince Mohammed bin Salman to Kuwait in September 2018. This visit was cut short over disagreements that included Kuwait’s preference for a diplomatic resolution of the Qatar blockade

The fact that Kuwaiti politics was less stormy between 2013 and about 2019 did not, however, denote that any of the contentious underlying issues had been resolved, such as the relationship between the mostly appointed cabinet and the elected (and strongly populist) MPs

38 MPs backed a motion to question the prime minister, Sheikh Sabah al-Khalid Al Sabah, over claims of constitutional irregularities in forming the government, leading ultimately to the cabinet submitting its resignation in January 2021

the replacement of four cabinet ministers, including the Minister of Interior, Anas al-Saleh—who had become a lightning rod for opposition criticism—failed to significantly placate opposition MPs, who sought unsuccessfully to block the swearing in of the new cabinet in April and criticized a decision to postpone all parliamentary questioning of the prime minister until 2022.

the political opposition in the National Assembly lacks consensus of its own on policy objectives and the degree to which it should negotiate with the government on specific issues. So long as there are no changes to Kuwait’s electoral law or to procedural (and constitutional) aspects of the way politics is conducted, and the government and parliament coexist, little in practice is likely to change. The populist streak that has long been such a characteristic feature of Kuwaiti politics continues to complicate efforts by the Kuwaiti authorities to respond to public policy challenges caused by the COVID-19 pandemic and the oil price collapse of 2020 that, itself, followed years of growing budget deficits

Kuwait has not run a budget surplus since 2014 when the long oil price boom that began in 2002 ended, and fiscal deficits have risen sharply. Whereas officials in other Gulf states responded to revenue declines by scaling back subsidies and introducing a variety of new taxes and fees on their citizen and resident populations, the maneuverability of Kuwaiti authorities was constrained by the difficulty of securing National Assembly support for such measures

almost 72 percent of spending in the budget proposed in June 2021 will go to salaries and other entitlements

While Kuwait remains one of the wealthiest countries in the world, the authorities have had to resort to short-term measures, such as withdrawals from its General Reserve Fund, to plug spending gaps, actions that are poor substitutes for a long-term solution

General Bachir Tartag was recalled from retirement in 2012 to head the Directorate for Internal Security (DSI). Gen. Tartag, who is believed to be in his sixties, made a name for himself during the civil war against the Islamists as one of Algeria’s most notorious hardliners and a brutal military commander.

the EAF is able, through the use of land designations and other means, to control much of the public lands (desert, agricultural and urban) that comprise 94 percent of Egypt’s area, through the use of land designations, the ability to auction such lands and to receive compensation from the state treasury when military zones are rezoned to civilian purposes. The army also controls the coastline (officially classed as border territory) and is thus able to profit from tourist developments. As such, the EAF wields enormous influence over the real estate market and the country’s development structure

Estimates as to how much of the total economy is controlled by the EAF range from 40 percent, according to telecoms billionaire Naguib Sawiris (in comments to local media last March) to somewhere between 45 percent and 60 percent, according to Transparency International

the consensus among those asked by Middle East Eye as to the size of the military-economic complex is that the EAF’s reach extends into virtually every economic sector, from foodstuffs like tomato paste and olive oil, to consumer electronics to real estate, construction, transport and services

since the military’s budget - and by extension, its economic fiefdom – is kept secret, EAF-controlled businesses can benefit from subsidies that are kept off the books, as well as having more freedom of manoeuvre amid the lack of oversight.  One example was the decision under the Supreme Council of the Armed Forces to slash fuel subsidies for industrialists. Since the military’s budget (and therefore, its energy costs) are off the books, the rising energy prices disproportionately affected EAF competitors, but not the forces themselves

military involvement in the political economy generally leads to worse performance. Within the region, the examples of Iran and Algeria point to this, while China has taken steps to reduce its armed forces’ commercial exposure over the past few years precisely for this reason

A further effect of the EAF’s economic dominance is a lack of growth opportunities for SMEs, since only favoured insiders can win lucrative contracts and deal with the permit system. In turn, this leads to a large informal economy of insiders, leaving many Egyptians outside, in poverty

While patronage is nothing new in Egyptian politics, since President Abdel Fattah el-Sisi came to power the top brass has expanded intra-military patronage to the extent that they are crowding out other economic actors and failing to bring in key constituencies such as opposition groups, the private sector bourgeoisie and the urban poor. The EAF has expanded its reach so fast that now it has to defend its empire against these groups, sowing seeds of further strife in future.

The problem is that the Egyptian political class, and the protestors in Tahrir, was split on the question of elections and could never form a united boycott front to push SCAF to take the elections seriously (or push for a better transition plan). There was never a credible alternative presented to SCAF's transition plan, and Islamists in particular, by endorsing the flawed referendum process, made it impossible to call SCAF's incompetence. Over the summer it was because secular-Islamist arguments squandered the attention and energy of the political class. More recently it was was in part because of the MB (although the argument that liberals wanted to postpone elections because they were afraid of the MB does not hold: the MB will do well now or in three months' time), which saw in the elections a chance to consolidate their newfound political legitimacy as well as a better source of legitimacy then Tahrir with which, should it choose to, it can confront the SCAF (assuming it does well in the elections.)

Remember that in the last 20 years most Egyptian parliaments were seen as invalid, with the state preferring to gloss over the results of lawsuits contesting results (even by the Supreme Constitutional Court) rather than accept the invalidity of successive parliaments (and hence the laws they passed.) The next parliament may be on shaky legal ground, although this will probably (as under Mubarak) be ignored for convenience's sake. Except this parliament will produce the next constitution. 

The year ahead may be full of decisions regarding the elections, and the government and parties will probably want to ignore them, subverting the rule of law for stability's sake. All because they did not spend enough time thinking their decisions through.

the degradation of the state's institution, its ability to implement (or defend) the rule of law, and the very little legitimacy the state enjoys. In global surveys, I remember seeing Egypt ranked alongside Congo in terms of "legitimacy of the state".

Egyptians deserved better than the process they got today, and they should work to get the people who put them in this position out of power as soon as possible.