The 200kd give away is the best thing that the government can do for the Kuwait economy. Yes granted t
hat people can talk about how it can be spent else where, prescription website like this but this is just $.5 billion out of a $4.5+ billion surplus. I am sure they can use
the other 4billion for schools, hospitals and other things.
So how is this amazing? Well it all goes down to economics and the multiplier. When the government gives out 200,0
00,000 KD to the people of Kuwait tax free and with no strings attached, they are going to spend about
3/5th of it.
So 200m * .6 = 120m
That 120 million will then be in other peoples pockets and they will spend it.
120 * .6 = 72
This multipier will keep going and according and to my Excel sheet create 500million KD. that will be
spent and circulating in the economy.
By having the people spend the money, and companies and individuals earning it. This creates a postive
cycle and growth in the economy, leading to jobs, higher wages and a better standard of living.
Also since some of this money will also be leaving Kuwait it will benifit countries that export since
it will boost their economy and increase their wages, and reduce the burden of the high oil prices tha
t has been affecting them and encourage them to buy more oil thus helping Kuwait.
I believe within 6 months of the money being released we will see an increase in employment and overal
l wealth in Kuwait. But lets not forget there is that other 4billion that the government will spend an
d invest and that will also be part of this multiplier effect.
There are other factors to consider in all of this, but I am not Greenspan so I can’t predict it all but the basic numbers are there and poin
t to a positive growth for Kuwait.
Sadly I think this is Jabir’s swan song, and By doing this he is leaving on a high note with the Kuwai