Despite having one of the highest Gross Domestic Product per person in the world due to high returns from the export of oil, most Kuwaitis cannot afford to buy housing and, accordingly, are completely dependent on the government to provide that need—leaving about half the population on an ever-expanding housing applicant list. Moreover, about ninety percent of the citizens work for the government. These two crises are compounded with depleting oil reserves and an unstable global market. In the past few months, the price of oil has alarmingly plummeted a staggering fifty percent, which has rightly highlighted the gravity of the current predicament.
Among other secondary causes, the current setting was mainly engendered by the government’s policies six decades ago. In the 1950s, Kuwait was set on a radical transformation path from a primitive mercantile trading port town into a modern socialist welfare state made possible by newfound oil wealth. The existing urban fabric was almost completely razed and a new central business and civic district was erected in its place (it was done sporadically— leaving many abandoned plots behind). Residents of demolished dwellings were relocated into automobile-oriented housing suburbs outside the new downtown and served by an array of welfare services. Urban development for the most part did not take place except through the government, and by the government in the case of housing its citizens, which was produced at a very slow rate. To put things in perspective, the current backlog of housing applicants has reached 111,000, whereas the country has about 140,000 housing plots built since the 1950s. These two facts mean that a “second Kuwait” will be needed in the near future.
In light of this dilemma, within a public policy setting, this project will be divided into two main parts: study of the crisis (background and analysis) followed by four policy options to reduce the applicant backlog. The four options will include: first, the status quo (continuation of current policies); second, involving the private sector with regulation and oversight by the government while keeping current development policies (automobile-dependent suburbs); third, involving the private sector—again, with regulation and oversight—but with radical changes in the current urban form to make the built environment more integrative of various uses to become less dependent on the consumption of oil; and finally, a policy of leased housing welfare, as opposed to ownership. The third option will be recommended in the final chapter since it will make the market more affordable while providing the framework for diversifying the economy (by encouraging an emerging class of entrepreneurs) coupled with reducing dependence on oil consumption.