Challenges to fiscal stability
i n december 2008, oil minister mohammad al-aleem declared that the political climate in kuwait was not conducive to advancing development projects. this statement marked a critical turning point for the grand dow project, effectively sealing its fate.
al-aleem’s remarks came less than 24 hours after the popular action bloc issued a stern ultimatum to prime minister nasser al mohammad : cancel the dow deal or face interrogation.
the minister further clarified that media reports on the project’s penalty clause were inaccurate, emphasizing that the $2.5 billion fi ne represented the maximum amount a court could impose and would likely be reduced.
al-aleem, associated with the muslim brotherhood, expressed frustration over the involvement of the salafist party, led by khaled al-sultan and his allies, who also called for the deal’s cancellation and threatened interrogation if their demands were not met.
these developments highlighted the minister’s inability to rally his political bloc or secure support from independent mps and the government’s usual backers to advance the project. al-aleem also failed to negotiate a reduction in the financial penalties, leaving his stance on the project notably weak and unconstructive.
similar political challenges surfaced with rashid al-amiri, a former oil minister also linked to the muslim brotherhood. during the iraqi invasion of kuwait, al-amiri announced that kuwait would adhere to its opec production quota only until september, a move interpreted as a veiled intention to exceed the quota. this declaration fueled saddam hussein’s claims that kuwait was harming iraq by overproducing oil.
al-amiri faced criticism again after liberation when he prematurely announced that oil workers had begun defusing explosives planted by retreating iraqi forces. this prompted some iraqi units to return and re-mine the oil wells.
in later interviews, al-amiri took undue credit for the rapid extinguishment of kuwait’s burning oil wells. in truth, this accomplishment belonged to the kuwaiti fi refighting team led by issa bouyabes and sarah akbar, with crucial assistance from american authorities, who facilitated the entry of international teams from countries like iran and canada.
al-amiri’s exaggerated accusations against western companies during a press conference, coupled with vague references to conspiracies, lacked substance and credibility, especially decades after the events.
in september 2011, another oil minister, mohammad al-busairi — also affiliated with the muslim brotherhood — approved a controversial and unprecedented salary increase for oil sector workers to avert a union strike.
this decision, described as a major administrative misstep, promised that the raises would not burden public finances, claiming they would be covered by the petroleum corporation’s funds.
al-busairi’s decision had farreaching consequences, triggering widespread discontent among other government employees and leading to a cascade of demands for pay adjustments across various sectors.
while some demands were met, the broader issue escalated, posing a lasting strain on public finances. although subsequent governments took a firm stance to contain the fallout, the problem remains unresolved since 2011, with its financial and social repercussions continuing to challenge kuwait’s fiscal stability.
