One of the world's richest countries is struggling to make ends meet as a sharp decline in energy prices raises profound questions over how Persian Gulf states are run.
While the country has about $550 billion in assets stashed away in the Future Generations Fund, the fourth-largest sovereign wealth fund designed to ensure prosperity after oil runs out, depleting that fund is a controversial proposition.
Some Kuwaitis say the time has arrived. Opponents warn that without diversifying the economy and creating jobs, the savings would run out in 15 to 20 years.
"It's not a solvency problem, although it's considered a cash drought," said Jassim Al-Saadoun, head of Kuwait-based Al-Shall Economic Consultants.
The Kuwait City-based wealth fund has already come to the rescue, purchasing over $7 billion of assets from the Treasury in recent weeks. Parliament approved plans to halt, in years of deficit, an annual transfer of 10% of oil revenues to the fund, freeing up another $12 billion, but not enough to cover the budget shortfall.
To do that, the government has to borrow. But after a debut eurobond issuance in 2017, Kuwait's public-debt law lapsed. Mr. Al-Sheetan's warnings about wages came as he tried, unsuccessfully, to convince lawmakers to support plans to borrow up to $65 billion.
His request coincided with a series of corruption scandals, some involving senior members of the ruling family, and lawmakers demanded the government end graft before accumulating debt.
Mr. Al-Sheetan is the fourth finance minister in as many years. Kuwait's had 16 governments and seven elections since 2006.
The deadlock has undermined investor confidence. In March, S&P Global Ratings put Kuwait's sovereign rating on negative watch. Moody's Investors Service followed. The International Monetary Fund said that month Kuwait's "window of opportunity to tackle its challenges from the position of strength is narrowing."
"The belief system in Kuwait is that we're rich for infinity," said Fawaz Al-Sirri, who heads Bensirri political and financial communications firm. "No one has the political capital to tell the Kuwaiti people that the party will be over soon if we don't support change."
When Kuwait's then-Finance Minister Anas Al-Saleh warned in 2016 that it was time to cut spending and prepare for life after oil, he was ridiculed by a population raised on a seemingly endless flow of petrodollars.
Mr. Al-Saleh is long gone, shifting to other cabinet positions. A successor, Mariam Al-Aqeel, moved on in January, two weeks after suggesting Kuwait restructure a public sector wage bill that's the single biggest drag on state finances. Her replacement, Barak Al-Sheetan, warned last month there wasn't enough cash to pay state salaries beyond October.
Slow to adjust big-spending habits as oil revenues fall, the Gulf states are hurtling toward a moment of economic reckoning, prompting renewed debate over the future of nations that for decades bought popular loyalty with state largesse.
"We're going to wake up one day and realize we went through all our savings, not because we didn't check our bank statement but because we looked at it and said, it's probably a bank glitch, and then bought the latest Rolex," Mr. Al-Sirri said.
The OPEC club of oil exporters has revived crude from its historic drop this year, but $40 is still too low. The coronavirus pandemic and shift toward renewable energy threaten to keep prices depressed.
