ALRAQABA . ISSUE 18 37 Public Debt and Its Impact on the Fiscal Position of the State of Kuwait Article Feature - Editorial Secretary - Ahmed Mohammed Al-Mukaimi Director of Independent Bodies of Financial and Investment Affairs Audit Department & Head of Government Bonds Issuance Follow-Up Team Introduction: The State of Kuwait relies on oil sales revenues for funding its annual public budget, making up around 90% or more of the State’s public revenues. Meanwhile, in light of the scarcity of reliable alternative resources, the dominant reliance on oil has led to increasing risks related to funding the public budget. This is attributed to the fluctuation of oil prices that are subject to many factors, mainly: - The geopolitical influences, particularly in the Arab region. - The reliance on supply and demand within the international oil markets. - The emergence of new producers from different areas around the world. - Shale oil challenges to fossil oil. - The limitations imposed by oil-importing countries in relation to environmental pollution, such as imposing taxes on factories’ gas emissions and on Carbon. - The increased reliance on clean and renewable energy sources such as wind or solar power, the power produced from river dams or sea waves, or the nuclear power employed in peaceful activities. - The international financial crises that affect the global economy, some of which resulting from natural disasters such as the COVID19- crisis. - The reliance on electronic transportation in order to avoid environmental pollution resulting from using oil. With the severe and persistent drop in international oil prices that started in the fiscal year 2015/2016 and continues up to date, the public budget of Kuwait has suffered a severe deficit that has been paid off by the General Reserve Fund (GRF). This has affected the liquid Article Feature
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