City Research Online

Abstract

The oil boom in Kuwait, starting in the mid-1940s, brought about several economic and social changes. Economic activities have developed very greatly, with increasing numbers of immigrants from different countries entering the country, providing the quality and quantity of labour required to build a new economic infrastructure.

The government sector has grown accordingly in order to carry out the requirements development has demanded, in the process absorbing Kuwaitis previously engaged in various crafts. The number of Kuwaitis in the government sector has increased considerably, as they have come to enjoy guaranteed work, high earnings, and social security benefits paid during disability and old age.

Kuwaitis in the other sectors of employment, and non-Kuwaitis in all sectors, have lacked these social security benefits. With the introduction of the Social Insurance Law in 1976, Kuwaitis in the other sectors were granted income maintenance in the event of sickness, industrial injury, disability, and old age; and this protection will be provided for their dependants after the death of the insured contributor.

One aim of this new legislation is to persuade Kuwaitis to move from the overstaffed government sector to other sectors, especially to the private sector, which has up till now been run mainly by non-Kuwaitis. It is also an intention of the legislation to redistribute the surplus national wealth derived from oil to long-term rather than immediate ends, by providing generous retirement benefits for Kuwaitis. This was designed mainly to avoid the inflationary consequences and the social disorientation which might result from pumping an excessive degree of wealth into the economy in just a few decades.

The social insurance programme has shortcomings which not only might obstruct the attainment of its own objectives, but more seriously might conflict with overall national development plans. Indeed the adoption of early retirement provisions, and the absence of a fixed retirement age policy, may adversely affect the supply of Kuwaitis in the labour market.

Government neglect of non-Kuwaitis in the area of social security benefits may also affect the future supply of foreign labour required, as it also leaves the majority of the labour force in Kuwait without protection against future economic and social risks. It may well increase social and economic costs in the future.

Nevertheless, the shortcomings discussed in the study in no way lessen the significant contribution recent changes in social security reform have made to the welfare of the Kuwaiti population.

Publication Type:	Thesis (Doctoral)
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HN Social history and conditions. Social problems. Social reform
Departments:	Bayes Business School > Bayes Business School Doctoral Theses Doctoral Theses

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