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Four ways the planetary crisis is impacting mental health



Four ways the planetary crisis is impacting mental health
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South Asian region is excessively wide-open to climate change effects; comprising higher temperatures, sea-level rise, inconsistent rainfall, amplified occurrence and harshness of extreme weather incidents, increased overflow and glacial melting. It is anticipated as the nastiest impacted regions by climate change and global warming because of geophysical environment in addition to the socio economic and demographic backwardness of population. There are millions of people bearing the burden of these catastrophes due to reliance upon climate sensitive segments such as forestry, fishing and agriculture for their daily needs. Biodiversity, human health, food security, energy, water, agricultural output as well as coastal arrangements are going to imperil causing increased migrations ultimately escalating pressures over main towns (Hans, 2020).

With the help of mainstreaming climatic resistance in to community development policies and taking along confirmed worthy development practices in to resilience approach conveyance as well as through integrated aptitude towards it can easily help to accomplish uneven methods to advancement and combating negative outcomes of climate change. It is an urgent necessity for domestic, regional and global level to mitigate and take adaptive measures for facing the harsh veracity of climatic change. South Asian states “as one bloc” should make constructive negotiations via international organizations. To achieve this, further regional considerations, cooperation and mutual work is required.

This article attempts to assess the over-all condition of South Asian climatic change and role of national and international organizations in this regard. It also suggests the adaptation based actions and other recommendations to bring improvement. For this, it has been divided into three sections with the explanation below;

Section-I Climate Change in South Asia; Particular Records and Evidences

It is expected that South Asian region will experience 2-6 degree of Celsius increase in the temperature by the ending 21st century era (Rabindranath, 2002). Heating up of roughly 0.21 Degree-Celsius every ten years is anticipated for coming twenty years (Jayant, 2007).

Past and future climatic aspects and alterations in temperature are shown here. (Figure 01 and Figure 02)

(Figure-01) Current/Past Köppen Climate Classification map for South Asia (1980-2016)

(Figure-02) Predicted Köppen Climate Classification map for South Asia (2071-2100)

According to the experts, South Asia is already suffering the wrath of climate change. There are influences on economic enactments of the South Asian states mainly and the livelihoods of thousands of folks of this area are affected and even in the near future this situation will be worst. South Asian region is projected as the most awful affected global regions because of climate change, and this is due to various reasons: like geo-climatic surroundings, excessive dependence on agriculture, socio-economic and demographic credentials etc. (Nazrul Islam, 2014).

Yohe et al., (2008) reflects that biodiversity, coastal ecosystem, food, human health, water resources, land deprivation etc. are deliberated as extremely vulnerable for this region on basis of climatic-change. Cyclones, famine, overflows, storms etc. are in the lives of millions of South Asians. On the other hand, the severity and intensity of these incidents in the recent times are increasing badly which is very worrisome. Scientists discourse that because of inclusive climate-change, incidences like these, will increase in coming era and take along a lot of despair for lots of folks. In this region, forthcoming years in several parts mainly in Maldives, islands or coastal areas of India and Sri Lanka, Southern coastal localities of Bangladesh are totally unreliable. Evidences illustrate that rise of 1 meter in the sea-level may cause an economic cost of 1259 million dollars in India only and this is almost equal to 0.37% of the total GNP (Jayashree, 2007). Total GDP loss since 2010 to future projection till 2100 has been shown here (Figure-03). Besides this economic loss, another worst consequence will be the incursion of ‘environmental refugees’ (term proposed by Lester Brown in 1976) in the overburdened hubs of South Asia, that is going to jeopardize the environmental, commercial, as well as societal balance in this region.

(Figure-03) Total Economic cost (GDP Loss) of Climate Change, South Asia

South Asian region is susceptible to various climate change hazards which are linked with its geography, population, economic infrastructure etc. These are;

Glacial Melting: The peaks of Himalayas are sustenance for almost one and half billions of population, living in flood-plains of several rivers flowing from it. Around 10 percent rivers of Himalaya emanate by water-melting of snow peaks, and is very indispensable for endurance during dry spells (ADB, 2009). But due to growing temperatures, the Himalayas’ ice mass is waning more speedily than universal average, and it will badly impact the Basins. Water scarcity during summer-months, that denotes approximately 61% of the yearly current, can impact this zone at the crucial time while people want water for the purpose of cultivation or hydro-power in addition to others. The change in snow melting and snow covering patterns will be affecting river flow in coming term (ADB, 2009). As per the studies of International Centre for Integrated Mountain Development, at hand are possibly twenty unsafe glacial water bodies in Nepal as well as twenty-five in Bhutan, which pretense hazard of upsurge overflows towards remote populations (Ives et al., 2010).

Land Erosion: Increase in floods, storms, surges, rainfall, rise in the sea-level besides anthropological activities are reasons of deteriorating destruction in South Asian zone. Over-grazed rangelands, coastal lands and stripped highlands got pretentious specifically. 26.5 percent of coast-line is disposed to corrosion in India, by around 450 hectares of mass land lost on yearly basis. Coastline of Sri Lanka is also matter to substantial erosion in specific areas, whereas the mountain state is susceptible to the recurrent landslides. Mountain communities in India, Bhutan and Nepal, are facing landslides regularly (Hans, 2020). Economies, habitats, agriculture and narrowing livelihood prospects, especially of the country side underprivileged are getting damaged. In South Asia, shoreline besides foothill territory erosion is going to worsen in years ahead because of extreme weather events occurrence due to climatic change.   

Rising Sea-Level: Stretched plus comprehensively settled coastlines of the region are extremely in danger of sea-level increase. Only in state of Bangladesh the level of sea is anticipated to upsurge 46 cm by the year 2050, affecting 10 to 15 percent of land mass and assessed 35 million people (GOB, 2007).  It has been also projected that sea-level will grow by 15-39 cm by 2050 in India, placing major cities including Kolkata, Kochi as well as Mumbai at menace. A great fraction of Coastal line of Sri Lanka stays under 1-meter overhead of the sea level, which can get sunken due to high waves, alongside its transportation substructure. Average altitude of Maldives’ landmasses is 1.50 meters above the level of sea, therefore survival is in threat which could be triggered by large scale migrations, having ripple impacts across the borders. Rise in the sea level gives path to saline water incursion, which possess risk for supply of drinking water, agriculture and aquatic lives. Above hundred million hectares got affected in Bangladesh, and whole of Maldives got wedged via salt-water meddling because of rising of sea-levels. It also came under forecast that Thatta and Badin-two historical cities in Sindh, Pakistan will get swallowed by the sea till 2050 because the sea is encroaching eighty acres of land per day. Sea-level rise has been shown covering 21st century over here. (Figure-04)

(Figure-04) Anticipated sea level changes by the end of 21st Century for Three Emission Scenarios based on Geophysical Fluid Dynamics Laboratory Model Results

Floods: Major zones of India, Bangladesh, Sri Lanka and Nepal are inclined to recurring floods because of low elevation, heavy monsoon rains and blocked natural drainage. Melting of glaciers and rising of seas levels with maximum chance of storm surges and flooding caused by climatic change can put state of Bangladesh at specific risk, because of three large river systems’ convergence, side by side assembling the rainwater of an area twelve times larger than the country. In Bangladesh for nine months, floods could last. Abrupt monsoon rains trapped South Asian region improvised to deal with the floods, which affected almost thirty million people of India, Bangladesh and Nepal in 2007. Approximately 1.1 million homes and 11 million people got damaged and displaced during 2010 floods in Pakistan (Hans, 2020). Recent flood in 2022 has also caused a huge loss to Pakistani nation.

Cyclones: Cyclone Amphan, a strongest storm is one of the recent examples which slammed into India and Bangladesh in May, 2020. It ended up with 3 million evacuees and damaged around 2 million homes there. People of India, Bangladesh and Sri Lanka were displaced at large scale. Such stormy weathers are recurrent shift triggers. Back in year 2009, 2.3 million Indians and nearly 1 million of Bangladeshi people were displaced by Cyclone Aila (Kugelman, 2020).

Section-II National, Regional and Global level Climate Actions in South Asian

National Level Efforts: Laws and policies are made for mitigation and adaptation against climate change by governments across South Asia. In 2005, after Indian Ocean Tsunami had affected millions of people, Maldives had developed a plan to relocate their population towards higher grounds and now they plan to build new islands altogether. But issues like corruption, not enough funds and poor infrastructure are great hurdles in the enforcement of these policies. Currently national initiatives range from basic to proper proactive measures like plantation, constructing concrete houses at coastal areas etc. In India, action plan promotes energy efficiency, renewable energy, water management and sustainable agriculture. For reducing migration risks elevated from climate issues, Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) guarantees to provide hundred days of paid-employment yearly to the wages manual worker. 10 billion US Dollars are given to 60 cities for developing infrastructure by Jawaharlal Nehru National Urban Renewal Mission, so that they can accommodate migrants from other parts. Moreover, the program Afat Vimo gives insurance for losses such as of earthquakes, cyclones, landslides or floods etc. In the meantime, there is a climate change policy in Pakistan for addressing migration due to climate severity, national food security policy for making agriculture productive and resilient to weather variations. Bangladesh is also initiating its plans under National Strategies on the Management of Disasters and Climate-Induced problems. Sustainable productions of fruits, forests as well as fish resources are being developed. The state is forerunner of this region due to putting efforts for integrating climate-change issue in to interagency structure of its government. Policies are made for establishing climatic change organization, governmental advisory body and planning commissions in every ministry.

States of this region emphasized sustainable farming progression and put efforts for reducing water-resources’ vulnerability besides aquatic threats for addressing adaptation community based approaches are integrated with institutional systemic mitigation and adaptation (MOE, 2011a, 2011b; MOEF, 2012a, 2012b; GOIRP, 2003; RGOB, n.d.; ROM, 2001; GON, 2011a; 2011b). Bangladesh set its objective to ensure food security from 2010 to 2015. Bhutan tried to promote adaptation in hydro power and agriculture sector by creating awareness and developing reliable capacity for facing climatic threats in future. India has enhanced infrastructure growth to ensure lesser impacts of weather disasters. Objective of Maldives’ government till 2020 was to assist adaptation in coastal settlement, tourism, health, water resources, food, agriculture, coral reef, fisheries as well as infrastructure development sectors. Nepal’s Action plan deals with food security related issues. Pakistan is aiming to guarantee foodstuff, water also energy-security for minimizing natural disasters’ impacts till 2030. Whereas Sri Lanka’s resilience to climate change programs focused on water resources, fisheries and agriculture segments during 2011-2016.

But despite of these policies and plans, actual implementation cannot be seen. Indian climate change action plan faced criticism due to lack of strategies for executing it. Institutions have failed to achieve their set agendas at a large scale. In Pakistan, situation is same as well. As their policy which aimed for an implementation frame work, actually did not implemented adaptation plans. Although capital has passed climate related laws but have not focused on enforcement. Provincial officials lacking technical or financial capacity faced challenges too. In addition to this negligence, Bangladesh even of it pioneer status, does not possess a national climate change policy and is facing many threats due to inefficient frame work.

Regional Level Efforts:  For combating environmental degradation concerns, regional cooperation got initiated during 1987 in 3rd South Asian Association for Regional Cooperation (SAARC) Conference. It was recognized there that natural disasters of this region are strongly linked with climatic change. For this purpose, “Regional Study on the Causes and Consequences of Natural Disasters and the Protection and Preservation of Environment-1991” as well as an additional reading over “Greenhouse Effect and its Impact on the Region-1992” was initiated. It recommended measures of sharing experiences, information and awareness regarding climate change, transferring technological skills etc. For revising those studies, in 1997 SAARC-Plan of Action for Environment got implemented. This made sure the formation of Regional-Centers of Excellence, like SAARC Meteorology Research Centre (SMRC) made in Dhaka-1995, SAARC Coastal Zone Management Centre (SCZMC) prepared in Male-2004, SAARC Disaster Management Centre (SDMC) built in New Delhi-2007 in addition to SAARC Forestry Center present in Bhutan lately. Centers provide reliable support to institutions for bringing the issues of climatic change or calamity risk-super vision in this region. SAARC also executed South Asia Disaster Knowledge Network from 2009 to 2012, financed by World Bank’s Global Facility for Disaster Reduction and Recovery. It shared information and awareness regarding risk minimization in region (Krampe & Swain, 2018).

As per SAARC, it is chief obligation of national governments to implement the Action Plan. Under regional cooperation, this Plan demands for effective mechanism which will cooperatively work with existing institutions according to the given guidelines and directions. Different Workshops like Science and Technology Solicitations in calamity menace Reduction Workshop-January, 2008-New Delhi as well as marine and coastal Risks in Goa-May 2008 highlighted the need of exchanging information and researches about climatic change adaptation among all the states in South Asia.

Climate Action Network-South Asia is also a civil society organization comprising more than 200 associations. It works to promote sustainable development and protects environment, by linking research, policies and work based on action for addressing adverse impacts of climatic disturbance. CANSA remain at forefront to represent Southern views at International Climate-negotiations.

Global Level Efforts: Various environmental conventions, agreements, treaties, legislations and protocols like the UN Conference on Human Environment-1972, Our Common Future-1987, the Earth Summit-1992, the Kyoto Protocol-1992, Johannesburg Summit-2002, Bali Conference-2007, Poznan Conference-2008, Hyogo Framework for Action-2005 to 2015, Paris Agreement-2015, Asia-Pacific climate change adaption information platform-2019 were joint efforts to combat environmental hazards and minimize impacts of climate change globally.

International Union for Conservation of Nature-1948, United Nations Environment Program-1972, Intergovernmental Panel on Climate Change-1988, Global Environment Facility-1991, Earth System Governance Project-2009, World Nature Organization-2010 are some of the international-level organizations working for protecting ecology and environment world-wide. These all are based on framework of resilience based policies, early warning systems, disaster threat lessening tools’ usage, techno-legal regime for development practices, susceptibility and hazard calculations, land-use preparation, and augmenting official and lawful volumes to be adopted by nations and communities to combat environmental degradation security challenge. Integration of information about disaster risk management and enforcement of that information for bridging the gap of dealing with risks during environmental alterations is stressed by such international-level actions. The United Nations Framework Convention on Climate Change (UNFCC), under Kyoto Protocol aims that developed countries will stabilize discharge of greenhouse-gases in addition they would be provided by solutions and tools for such maintenance via promoting Clean Development Mechanisms in the developing countries. Another major contribution of the Convention was Bali Action plan for enhancing adaptation in risk management domains.

Natural tragedies with the menacing influences over subsist and their means of support are increasing, which basically shifted the paradigm towards disaster-management of South Asian regions. This shift is to all-inclusive management of disasters reduction covering its entire phases from only one post disaster reprieve and reintegration. Disaster Risk Reduction (DRR) is the main focus comprising preparedness, prevention and mitigation measures. These programs are related to hydro-meteorological disasters like flood protection, alternative livelihood initiatives, droughts proofing, saline embankment or bio shields etc. are same like programs of climate change adaptation. Therefore, integration between both of these programs is necessary. It will augment developments by increasing relevancy with the contemporary challenges.

Even after such efforts, human population is facing severe security challenge of environmental degradation which is leading towards survival hardships. On the contrary of all action plans, there is no legal framework for climate induced displacement and even there is no consent based definition of environmental refugee. However, International Organization for Migration has made a framework product on dealing with migrations due to climate change after research has been done in Bangladesh, Sri Lanka and Nepal. Red Cross and World Bank have also offered scientific and technical assistance for catastrophe risk-management agendas in states here. Region’s Water-Initiative by World Bank gives analytical and technological help for forecasting floods in Ganges Basin. Climate adaptation and resilience for South Asia is another venture which provides funding for development. Bilateral donors, UK’s National Weather service and aid-agency also contributes in developing early-warning structures for climatic susceptible populations of the region.   

Section-III Solutions based on mitigating and adaptive methods to combat climatic change impacts

National, regional and international efforts are encouraging but these are not sufficient. There is much more the local and global community should do for helping reducing exposure of region to climate vulnerabilities. 

Here are some suggestions by which the severity of climate change impacts can be minimized:

1.Carbon emissions should be reduced and environmental friendly, sustainable technologies with less carbon-emission should be used. Due to emission of greenhouse gases via thermal plants, renewable energy sources are required to be used. All governments should make re-forestation their priority and ensure sustainable use of forests, natural resources and specially water.

2.More livelihood opportunities should be promoted in the non-agrarian domains. As it’s the major income source of a lot of South Asians and though a vulnerable segment. Therefore, farmers and other workers are susceptible to weather alterations. International organizations can donate for vocational trainings and skill enhancement programs for making millions of population able to work in other sectors like electronics, retails, telecommunications etc.

3.Provincial authorities should be empowered to tackle climate related disasters. In this region provincial governments lack requisite resources and expertise to combat impacts so they should be trained and funds should be provided to them. Decentralization is not enough when there is no implementation of policies at local or ground level. Analysts identified it very critical for the case of Pakistan, Nepal and Bangladesh (Parry et al., 2013, p. 33; Regmi & Bhandari, 2013; TAF, 2012). Sponsor trainings and awareness programs as well as check and balance by federal officials can solve this issue.

4.United States should assimilate climate change adaptation and mitigation assistance in to administration’s main Asia Policy and Indo-Pacific strategies. US officials consider South Asian region as fragment of Indo Pacific region therefore, aims for making strong ties with this region under the policy. Although cooperation based areas are less in number mainly based on counter-terrorism or maritime joint venture. US should allow its American Development Bank for investing in sectors like sustainable agriculture or disaster resilient structure for minimizing climate-change effects.

5.There is lack in financing and funding and this is a major reason for working on adaptation based measures against climate threats. Policies regarding it are hindering the situation as Pakistan can be taken as an example which primarily focused on external financing and not promoting internal one to deal such threats (GOP, 2012). There were bilateral donors helping like in 2009 almost eighteen donors assisted Nepal in climate change adaptation and same happened in Bangladesh, but implementing the plans into firm actions had been often seen here (CCNN, 2011; Alam et al., 2011). For overcoming these kinds of hurdles, internal as well as external parties should donate for the cause to protect whole region from adverse impacts of climatic severity.

6.Regional cooperation is a great need of this time to jointly combat the threats of climatic change. The region is rife with many tensions and strains among Pakistan and India, Afghanistan and Pakistan as well as India and other smaller neighboring states. Intra-regional trade is also less as compared to other regions and non-existence of commercial collaboration further deprives it from solidification and mutual path towards prosperity. In addition to this, the main regional body SAARC is somehow paralyzed in taking actions because of Pakistan-India stress full diplomatic relations. Diplomats from neutral states and other external actors should therefore initiate Track-II diplomacy and arrange multi-lateral forums for helping to build consent based joint plan, by which climate change threats can be addressed. Programs like Dhaka Declaration on Climate Change and SAARC Food Security Reserve should be implemented which had languished for years. These can promote regional cooperation and capacity building as well as can reserve food grains for communities exposed to climate threats during disasters.

7.Furthermore, governments, NGOs and other civil organizations of the region should play their role by disseminating mass awareness regarding climatic change, making people encourage to go for diverse means of livelihoods and different patterns of consumption with the help of media, education or social movements, make them motivated for applying adaptation and mitigation based strategies to combat climatic change impacts.


South Asian climate related security-risks demand for governments to step up and international communities to support the cause and save the region. Now is the time to better understand future climate anticipations’ implication for ongoing expositions. Though the efforts of integrating stakeholders and diverse structures of institutes in climatic change scenario are being made and many international level treaties, agreements or mega projects are planned but outcome is despondent. There is a lot more to be done. Responsibility lies on major powers-global policemen to compensate developing states by initiating development grants, projects implementations and infrastructure betterment.

COVID-19 crisis is a lesson and window of opportunity for all to re-form national and international politics according to the liberal stand point of cooperation. In climate change context, optimistic attitude is very much needed as radical change is always possible. Re-alignment of traditionalists with re-invention of liberal sustainable development plan as well as constructing innovative ideas, discourses and identities will definitely enable International relations for research in coming many decades of national and international level politics.

This research article confirms that paradigm shift is compulsory for confronting non-traditional security threats like climate change. Focusing environment as a referent object is way too necessary now for ensuring over all security and stability of this region as well as whole world. Globalized world and trans-national boundaries ask for more cooperative relations not only to promote trade or production but to fight mutually against every threat. Therefore, beside states, international community has to play its part for combating the contrary influences of climate variation. Individual level awareness and efforts are significant as well. In the beginning, it is only one step which takes all to mutual destiny, so making aware a lay man, who is more vulnerable to climatic hazards means a lot to the over-all contribution of adaptation and mitigation on climate-change in this region of South Asia.



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A Labour Government Should not Frighten the Horses




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The UK general election is likely to mean changes, but Gulf citizens need not be too worried.

By James Drummond

If the tension was killing you, now you know. If it wasn’t, then be aware that a general election in the United Kingdom will be held on July 4 – less than six weeks away.

For the hapless Rishi Sunak, it looks like a case of “If it were done when ’tis done, then ’twere well it were done quickly.” Polls indicate that after 14 years of conservatism, real or imagined, voters are likely to elect a new Labour government.

What does this mean for us here in the Gulf?

The six Gulf states are certainly exposed to Britain. The extent of GCC holdings in the UK is enormous, ranging from Qatari ownership of the Shard building in London, stakes in the Sainsburys supermarket chain and Barclays bank, to Sheikh Mohammed bin Rashid’s Godolphin stables in Suffolk.

Manchester City and Newcastle United football clubs are owned by Emirati and Saudi interests, respectively. Kuwait’s wealth is managed by the Kuwait Investment Office near St Pauls Cathedral.

Labour has been careful to detail very few policies (or hostages to fortune, as its strategists may see it), but last week, David Lammy, the likely new foreign secretary, outlined a further campaign against dirty money.

Britain is a “corruption services centre”, while London is a “hotbed of kleptocracy”, Mr Lammy said. He said that he wanted to reward whistleblowers and clamp down on “enablers” of financial crime.

Given the paucity of public announcements, Lammy’s speech is significant, because it implies that the incoming government is likely to act. Fighting financial crime is relatively uncontroversial and attracts cross-party support – although in the UK’s case with limited success.

British politicians have made similarly grandiose statements before. But after Russia’s invasion of Ukraine, London has moved particularly against Russian dirty money, and sanctioned individuals. It finally introduced an obligation mandating the disclosure of beneficial owners of property.

Overseas trusts are also now required to disclose their ultimate beneficial owners, and there is now greater transparency when registering entities at Companies House.

This seems to have had only limited effect, however. Last week Andrew Mitchell, the deputy foreign secretary, cited estimates that 40 percent of the world’s dirty money still passes through London.

Spotlight on Corruption, a non-governmental organisation, wrote in October last year that “major reform is needed to how lawyers and accountants, the property sector and company formation agents are regulated for money laundering.” Lammy may choose to take further action against these and other professionals.

Other so-called enablers include retired politicians, some of them in the House of Lords, who work as advisors to unsavoury actors. Labour could move to tighten disclosure, although several of its senior former members are likely to lobby against further transparency.

It is also possible that Labour will go further in taxing expatriates. In its limited public commitments, the party has promised to clamp down on “tax dodgers”.

Those with property in the UK already pay tax on rental income they receive, and worldwide assets are subject to Britain’s inheritance tax. Some Gulf Arab families with UK property have been caught by inheritance tax.

A government led by Sir Keir Starmer, the Labour leader, could go further, as the US does, in taxing worldwide income of its citizens, more than 200,000 of whom live in the UAE alone. The argument is that if you have the privilege of carrying the passport, you have an obligation to pay tax.

Another question surrounds nationalisation. Labour is committed to re-nationalising the railways for one, although the infrastructure is already under central government control.

But another target may – may – be England’s water supply network, which was privatised in 1989. Shareholders in various of the rump companies include the Qatar Investment Authority and Adia of the UAE.

The water companies have been the subject of a vociferous campaign, for allegedly paying their shareholders high dividends while neglecting maintenance and investment. It is possible that an incoming Labour government will nationalise the industry.

All that said, the primacy of the rule of law and respect for property rights remain strong in Britain.

Barratt, a mass housebuilder, reported earlier this week that London remains the top choice among world cities for UAE investors looking to buy overseas. The holdings of Gulf states and rights of Gulf citizens in the UK remain secure, even with a Labour government.

James Drummond is Editor-in-Chief of the AGBi

Courtesy: The AGBI.Com

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Kuwait’s Political Crisis Adds to Economic Uncertainty




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Kuwait’s latest standoff is deeply concerning for both the near and long term, writes Andrew Cunningham

The decision by Kuwaiti emir Sheikh Mishal Al-Ahmad to dissolve the country’s recently elected parliament just days before its inaugural session on May 14 presents overseas investors and Kuwaiti citizens with more uncertainty.

The situation raises concerns about the country’s economic prospects over both the short and long term.

Disputes and stand-offs between Kuwait’s emirs and its boisterous parliament are nothing new. Parliament has been dissolved, and the constitution suspended, numerous times over the past 40 years. The country has held four elections in the past four years.

Squabbling between the two sides is rooted in political disagreements and this most recent outbreak is no different.

A major factor behind the latest dissolution is believed to have been parliament’s objection to Sheikh Mishal’s choice of crown prince. Although the crown prince is nominated by the emir, the appointment has to be ratified by the parliament.

But these political, and sometimes personal, disputes have real consequences for Kuwait’s economy and financial system and, ultimately, for the long-term welfare of its citizens.

Kuwait is a prosperous country. If we take a snapshot today, we see it producing nearly 2.5 million barrels of oil per day (bpd), and there are plans under way to increase production capacity to 4 million bpd by 2035.

State foreign reserves are around $930 billion, according to National Bank of Kuwait, the country’s largest bank. With a population of a little over 4 million, its GDP per capita is one of the highest in the world.

Squabbling between the two sides is rooted in political disagreements and this most recent outbreak is no different.

A major factor behind the latest dissolution is believed to have been parliament’s objection to Sheikh Mishal’s choice of crown prince. Although the crown prince is nominated by the emir, the appointment has to be ratified by the parliament.

But these political, and sometimes personal, disputes have real consequences for Kuwait’s economy and financial system and, ultimately, for the long-term welfare of its citizens.

Kuwait is a prosperous country. If we take a snapshot today, we see it producing nearly 2.5 million barrels of oil per day (bpd), and there are plans under way to increase production capacity to 4 million bpd by 2035.

State foreign reserves are around $930 billion, according to National Bank of Kuwait, the country’s largest bank. With a population of a little over 4 million, its GDP per capita is one of the highest in the world.

In March this year, rating agency Fitch described Kuwait’s fiscal and external balance sheets as among the strongest of any of the governments it rates.

But when we look at long-term trends, the picture is more complex and less secure.

Kuwaiti government spending remains overwhelmingly dependent on oil and gas revenues. The government has made almost no progress, over many decades, in diversifying the economy away from oil, or in reducing the huge burden of government salaries and welfare payments.

Oil and gas revenues currently account for nearly 70 percent of total income and, according to IMF projections, will continue to do so for the rest of the decade.

These revenues have served the country well in the past, despite the volatility of oil prices, but such overwhelming dependence looks foolhardy when consumers worldwide are striving to reduce consumption of oil and gas and investors and energy firms have pivoted towards renewables.

Nearly all of the Kuwaiti government’s non-oil and gas revenue arises from overseas investments and from dividends from state-owned companies. Tax revenues account for less than 1 percent of total government income.

Looking beyond the fiscal imperative to diversify the economy is the need to provide employment opportunities for Kuwaiti citizens.

No less than 84 percent of the Kuwaiti workforce was employed by the government at the end of 2022. It is hardly surprising that nearly half of government expenditure is allocated to the salaries of public employees.

Pressure for social spending will increase in the years ahead. A World Bank report, published last year, showed that levels of obesity and Type 2 diabetes were higher in Kuwait than in any of the other GCC countries and nearly double the average in OECD countries.

Partly as a result of this, the World Bank estimated that Kuwait’s old age dependency ratio – the number of people over 65 years old in relation to those of working age – will be nearly double that of its neighbours by 2040.

Kuwait is also a country that is being significantly affected, even today, by climate change. Temperatures during the summer can exceed 50 degrees, making Kuwait one of the hottest places on earth.

These are difficult and complex challenges, both economic and social, but they are hardly unique to Kuwait. That they are, in some cases, more acute in Kuwait than elsewhere is due to decades’ long procrastination and political paralysis.

The government’s General Reserve Fund, which held most of its liquid assets, was entirely depleted in September 2020, according to Kuwait’s own ministry of finance. With AA ratings, the obvious solution was to borrow money – Kuwait’s debt-to-GDP ratio is less than 5 percent. Yet the parliament has still not passed a so-called ‘Liquidity Law‘ that would allow modest issuance of foreign currency debt.

The parliament also held up the introduction of Value Added Tax (VAT), making Kuwait one of two of the six GCC countries not to fulfil a joint commitment to implement a minimum VAT of 5 percent.

Over the past four years, all three of the big international credit rating agencies have downgraded the government of Kuwait.

In their rating reports, all agencies cited a dysfunctional and slow-moving political environment that was reducing the country’s financial flexibility and delaying much needed economic and financial reform.

Politics matters.

It is unrealistic to think that after decades of enmity the ruling family and the parliament will soon form a harmonious working relationship.

But they do need to find some common ground that will enable them to start addressing fundamental economic and social issues while the country still has large financial reserves and strong credit ratings.

Time is running out.

Andrew Cunningham writes and consults on risk and governance in Middle East and sharia-compliant banking systems

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ICD and JSC Ziraat Bank Collaborate to Boost Uzbekistan’s Private Sector




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At the 3rd Tashkent Investment Forum, the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan took a significant step forward in their partnership to empower small and medium-sized enterprises (SMEs) and foster economic growth in Uzbekistan. The forum, held in the capital city of Uzbekistan, brought together key stakeholders from the public and private sectors to discuss investment opportunities and economic development strategies for the region. The collaboration between the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan is aimed at boosting the private sector in Uzbekistan.

During the forum, ICD and JSC Ziraat Bank Uzbekistan formalized an expression of intent to collaborate on various initiatives aimed at supporting SMEs. One of the key elements of this collaboration is the provision of a Line of Financing (LoF) facility by ICD to JSC Ziraat Bank Uzbekistan. This LoF facility will enable the bank to fund private sector projects as an agent of ICD, thereby providing SMEs with access to the necessary capital to initiate and grow their businesses.

The partnership between ICD and JSC Ziraat Bank Uzbekistan is expected to have a significant impact on the SME landscape in Uzbekistan. By equipping entrepreneurs with the resources they need to succeed, this collaboration will not only support the growth of individual businesses but also contribute to the overall economic development of the country. SMEs play a crucial role in driving economic growth, creating jobs, and fostering innovation, and this partnership will help strengthen the SME ecosystem in Uzbekistan.

JSC Ziraat Bank Uzbekistan, as a strategic partner for ICD, brings a wealth of experience and expertise to the table. As a prominent commercial bank with foreign capital, JSC Ziraat Bank Uzbekistan has a strong track record of supporting SMEs and promoting economic development. The bank’s partnership with ICD further underscores its commitment to advancing the private sector in Uzbekistan and its dedication to supporting the country’s economic growth.

ICD, for its part, is a leading multilateral development financial institution that focuses on supporting the economic development of its member countries through the provision of finance and advisory services to private sector enterprises. By partnering with JSC Ziraat Bank Uzbekistan, ICD is furthering its mission of promoting economic development and fostering entrepreneurship in Uzbekistan and across the Islamic world.

The LoF facility provided by ICD to JSC Ziraat Bank Uzbekistan is just one example of the many initiatives that the two entities are undertaking to support SMEs in Uzbekistan. In addition to providing financial support, the partnership between ICD and JSC Ziraat Bank Uzbekistan will also include capacity-building initiatives and technical assistance programs to help SMEs succeed in today’s competitive business environment.

Overall, the partnership between ICD and JSC Ziraat Bank Uzbekistan represents a significant step forward in supporting SMEs and fostering economic growth in Uzbekistan. By working together, these two institutions are helping to create a more vibrant and dynamic private sector in Uzbekistan, which will ultimately benefit the country’s economy and its people. The collaboration between the Islamic Corporation for the Development of the Private Sector (ICD) and JSC Ziraat Bank Uzbekistan is expected to have a far-reaching impact on the private sector in Uzbekistan.

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