In October 2013, Kuwait’s Prime Minister Jabir al-Mubarak introduced his government’s agenda with a bombshell — that “the current welfare state to which Kuwaitis are accustomed is not viable.”  Government projections estimate that expenditures will exceed oil revenues in only a few years if spending continues at the current rate. Analysis by the International Monetary Fund confirms that this event could happen as early as 2017.  The following month, the government declared it would review $16 billion in annual subsidies on goods and services, a spending program that accounts for 22 percent of the budget.
These pronouncements on the waning welfare state unleashed a wave of disbelief and reproach from Kuwaitis who point to the state’s significant expenditure on humanitarian aid and budget surpluses totaling more than $300 billion over the past 14 years.  Unlike some of its poorer Gulf Cooperation Council peers, Kuwait has enough oil to last for at least 90 years at current rates of production, without counting a newly discovered oil and gas field. 
Although Kuwait will have to undertake major economic reforms in the future, the immediate crisis is not fiscal insolvency,  but opposition to an increasingly dysfunctional rentier regime. The expanded social spending program since 2011 — about $3,572 in cash per person and over a year’s worth of free food  — has not quieted popular demands for political change. Kuwait’s history of active semi-democratic institutions, long-term demographic trends and local echoes of the Arab revolts have emboldened less privileged strata of Kuwaiti society — youth, tribesmen (badu) and the stateless (bidun) — to demand equal political and social rights. Focusing public conversation on declining state resources is an attempt to divert attention from issues of inequality and the regime’s bind: It cannot meet these demands without compromising the privileges of the political and merchant elite, thus violating its political compact and threatening its power.
Kuwait stands out among Gulf states for having the oldest and most powerful parliament in the region, established in 1963 as part of the independent country’s first constitution. Parliament exercises some checks on the monarchy through its veto power, its capacity to grill ministers and its ability to disapprove an emir’s appointment. Yet the system is only semi-democratic since the ruling Al Sabah family retains full control over key government and executive posts. For example, the emir is solely responsible for nominating the cabinet and holds the power to dissolve Parliament and call for new elections.
Since the beginning of parliamentary government in Kuwait, relations between the executive and the legislative powers have been strained; cooperation between the two bodies is rare. This antagonism is partly due to an institutional structure that assigns ultimate decision-making power to a monarch. Since 2006, however, elite struggles within the ruling family have eroded the constitutional checks and balances of Parliament. Princes now play out their political battles in the open, seeking alliances that have corrupted members of the legislative, executive and even judiciary bodies.
Despite the formal trappings of democratic representation and one of the most vibrant civil societies in the region, state institutions suffer from corruption and cronyism among the ruling family and their supporters. Kuwait’s ruling bargain depends on the state’s functioning as the near-exclusive provider of social resources — not through taxation, but through the redistribution of state revenues from oil. Such a rentier economy has created a passive form of citizenship by which citizens relate to the state primarily as economic dependents. This dependency, combined with an active parliament, a relatively free media sphere and an independent judiciary, has created expectations among citizens of continued social welfare and democratic accountability that constrain the authoritarian elements of the regime.
One consequence of this conundrum is the structural incapacity of the regime to diversify its economy and distribute its revenues in a more democratic fashion, leading to a vicious cycle of contention over redistribution. When conflicts over representation, power and resources arise, the regime has attempted to maintain the parameters of its ruling bargain by deploying classic strategies of divide and rule.
Kuwaiti society is divided along sometimes cross-cutting sectarian, tribal and center-periphery lines. Three main social groups constitute Kuwait’s 2.1 million citizen population: Hadhar trace their presence in Kuwait back before the discovery of oil in 1938 and live primarily in the cities; Shi‘a, although mostly hadhar, socialize in different community and political groups; badu migrated largely from Saudi Arabia between 1960 and 1980. In the first two decades of independence, political opposition was strongest among urban hadhar, who supported Arab nationalism. The tribes, on the other hand, were considered a politically safe population because of their support for traditional authority. The Kuwaiti monarchy promoted policies to naturalize badu populations in order to counter the hadhar opposition.
Since the 1990s, however, badu are no longer a reliable political base for the regime. A numerical majority of citizens at around 60 percent, they also constitute the bulk of the anti-corruption movement that crystallized in 2006. By 2011, badu youth were joined on the street by opposition members of Parliament (fed up with traditional political fora like diwaniyyas ), most dramatically visible in October 2011 when demonstrators stormed the National Assembly. This action led to the unprecedented resignation of Prime Minister Sheikh Nasir al-Muhammad in November 2011. Higher levels of education and growing political consciousness among young people of tribal lineage have broken down old hierarchies and the “docile” political obedience of their parents. The younger generation of badu feel disempowered by a state that continues to reward top-level positions in government and business to hadhar. As staunch defenders of the interests of the salaried middle classes, badu and their allies — including Islamists and urban youth, both Sunnis and Shi‘a — represent a populist strain in Kuwaiti politics that challenges existing redistribution policies and the privileges of a narrow elite. Meanwhile, socialization in Sunni Islamist movements was a vehicle of social ascension for young badu, while for the Islamists, tribal allegiances strengthened their electoral power, especially since 2006. This badu-Islamist alliance has reinforced the view among many hadhar elites and Shi‘i citizens of the tribes as a socially conservative force, gradually eroding Kuwait’s liberal political achievements and outlook.
A population that remains outside the official body politic but figures significantly in post-2011 political debates is the roughly 100,000 to 120,000 bidun — literally, “without.” (There are also over 1 million foreign workers, some of whom have lived in Kuwait for many years.) The bidun population is comprised of several groups of tribal origin (both Sunnis and Shi‘a) including residents who did not apply for nationality or lacked documentation at independence, foreign Arabs recruited to Kuwait’s nascent military and police in the 1960s who settled permanently, children of Kuwaiti mothers and stateless or foreign fathers, and Arabs of Iraqi and other origin who falsified or destroyed their identity documents upon immigration. Government rhetoric has particularly emphasized the identity and economic threat posed by the latter group. Bidun used to receive many of the same benefits as Kuwaiti citizens but have been progressively excluded from most services of the welfare state since the 1980s. This group has also mobilized over the past three years to demand citizenship and social benefits. A common tribal background and the position of badu citizens as latecomers to the state has made the predominantly badu opposition and their MPs particularly supportive of bidun rights. Nonetheless, with the exception of these tribal leaders and a few elite and highly liberal hadhar, Kuwaitis across various social strata remain wary of the bidun claim to citizenship, and have internalized government rhetoric about the group’s potential competition for state resources. Further, a split between the bidun and badu tribes in terms of origin — the majority of the badu are from southern tribes and the majority of the bidun from northern tribes, some of whom are Shi‘a — has mostly limited the possibility of common political identification and meaningful alliances between average Kuwaitis of hadhar, badu and bidun backgrounds.
“Waiting for a House”
A government poll in September 2013 showed that the housing shortage is a top concern of Kuwaitis, despite the exorbitant wealth of the country, estimated at $400 billion.  Over 106,000 Kuwaiti families (approximately 400,000 out of 1.2 million citizens, roughly one third of all Kuwaitis) are currently on the waiting list for government-provided homes. Under Kuwaiti law, every married couple is entitled to a house built on a 400 square-meter plot or a 400 square-meter apartment. Once the plot of land is allocated, the government offers a 70,000 Kuwaiti dinar (approximately $246,000) long-term, interest-free loan for home construction. With the current number of applicants for housing, an estimated 174,000 houses will be needed by 2020. In its 60-year history, the public housing program has financed a total of 93,040 homes.
Although there is pressure on the housing market from young Kuwaiti couples — half of the population is under the age of 25 — and limited open space in the country’s dense urban areas, many Kuwaitis blame the housing crisis on corruption. The emir’s call for the Kuwait Conference on Housing in March 2014 elicited bitter reactions on social media, an important public forum considering Kuwait is the most Twitter-connected country per capita. A new Twitter account, @na6er_bait (digital rendering of “natir bayt,” “waiting for a house”), accuses the government of fabricating the crisis. The account has almost 20,000 followers — about two thirds of all Kuwaiti Twitter users.  Critics of the government’s response to the housing shortage also decry plans to offer dense urban housing instead of stand-alone homes that state loans have typically funded.
The fundamental problem is neither scarcity of land nor lack of public funds. Only 8 percent of Kuwait’s land is developed and there is enough money to fund all the backlogged construction. Rather, a vocal parliamentary faction representing middle-class interests has used its legislative power to delay or deny government development projects out of fear that such tenders unduly enrich members of the business or ruling elite.
Land is, and always has been, a key currency for the government to use in cultivating political alliances. Housing policy in particular has allowed the regime strategically to divide Kuwaiti society while at the same time encouraging a sense of national belonging around the ownership of land — a central promise of the post-independence era. Merchant families profited most from the land acquisition program of the 1950s, and were granted large parcels of land at deliberately high prices, as the government purchased land from the townspeople at inflated prices to facilitate the relocation of urban families and to buy their loyalty as citizens through this quick form of rent redistribution. Early housing policies also led to the formation of distinct sociopolitical categories of citizens by segregating the urban community from the newly naturalized badu population, which was generally placed in housing on the outskirts of Kuwait City or in other remote cities altogether. Badu also received lower quality state services, especially in the size and quality of housing. 
Critics of the government argue that the current housing shortage stems from the vested financial interests of a group of powerful actors. With the growing assertiveness of the badu in Kuwaiti politics in recent years, popular criticism of the prerogatives of the merchants has mounted. The Islamist-badu allied opposition was among the first to plead for measures to supervise the often opaque process of distributing tenders and allowing foreign companies to compete for home construction bids.  Musallam al-Barrak, an icon of the opposition and general coordinator of the new Popular Action Movement (known by the acronym HASHD), blames Kuwait’s political paralysis on a “suspicious alliance between the merchants of corruption and the merchants of power.”  Others point directly to the owners of apartment buildings in the city center — known as “real estate princes” to their critics — whose profits depend on the 100,000-tenant rental market with little competition from government-funded housing.
Rather than reflecting a true crisis of scarcity, Kuwait’s housing crisis is an example of the dysfunctional political dynamics at work in rent distribution, which have been overtly contested following the Arab revolts. The state is trapped by the dynamic of the unequal redistribution of goodies it has created. The vocal parliament in Kuwait reinforces this trap, intensifying class contestation via populist claims over resources.
Foreigners and the Stateless
Anger about the government’s role in Kuwait’s housing “crisis” reflects the rise of populist politics in the country since 2011. Public pressure forced the government to pass a financial reform law in April 2013 through which the state purchased Kuwaiti consumer debt, canceled the interest on loans and allowed debtors to repay the government instead of the banks. Calls to write off consumer debt stemmed from criticism of the government’s support for banks and companies heavily indebted due to the global economic crisis. While commercial interests received state loans, a large majority of middle-income households were no longer able to repay loans on houses, cars and other consumer products. Although initiated by badu members of Parliament, the campaign to cancel consumer debt received massive support in the streets and on social media from a diverse coalition of Kuwaitis.
In 2014 calls have mounted in Parliament to curb the number of foreigners allowed to work in the country. Many Kuwaitis argue that foreign workers — primarily Asians, but also foreign Arabs — burden social services. The government has appropriated this rhetoric and cut the number of permits for expatriate labor by 100,000 per year, with the goal of reducing the foreign population to 1 million within a decade. In June 2013, Kuwait barred foreigners from using health care services in the morning hours, in response to alleged “overcrowding” at health facilities. The government has also restricted new driver’s licenses to foreigners who hold a university degree, earn at least 400 dinars (about $1,300) per month and have lived in the country for at least two years. A crackdown on illegal labor over the last year has deported thousands of Asian workers without the proper papers. 
Critics of these policies worry that the restrictions were implemented hastily and may have unintended consequences for Kuwait’s economy, especially in sectors that rely on low-wage labor.  Supporters argue that the measures will reduce overcrowding and the strain on government services, and that bidun residents could fill the employment gap, thus keeping “billions” of dollars in the country. Since foreign workers are often blamed for street crime, supporters also contend that the new policies will make the country safer.
Though arguments in favor of the crackdown on foreign labor rely on populist framing, most Kuwaitis benefit from a service economy dominated by underpaid foreign workers. Unemployment among Kuwaitis remains low, and there is no genuine willingness among citizens — who are largely employed in the public sector — to take over low-wage jobs.  The private sector has resisted labor market reforms that would drive up the costs of business. But the elites who benefit from Kuwait’s rich rentier economy, though deeply invested in the private sector, are keen to ensure its profitability is controlled by the state through labor and other regulations. Thus, populist politics and elite priorities reinforce one another on the question of foreign labor, pushing the regime to pursue a policy that runs counter to the immediate economic interests of the state and the vast majority of citizens.
As public anger turns toward foreign workers and non-citizens, the ongoing struggle by bidun to gain citizenship presents another political crisis both challenging and useful to the regime. The government body charged with resolving the bidun’s status — the Central System to Resolve Illegal Residents’ Status, known by many bidun as simply “the System” — says there are 108,000 pending applications for citizenship. Yet the government asserts only 34,000 have a legitimate claim to citizenship. Registered bidun are entitled to identification cards, known as “review cards,” and are allowed access to driver’s licenses and jobs. Since the 1980s, bidun can only receive health care and education funded by charities (themselves funded in large part by the state). These “private” services are of much lower quality than official state services. Reports indicate, however, that access to government-promised essential documents such as birth and death certificates has not materialized. Applicants can only seek benefits and citizenship through the confines of the System, whose bureaucratic procedures are opaque, slow and inefficient. An unspecified number of bidun have security restrictions associated with their names — for suspected foreign origins or for committing crimes — and will never be eligible for citizenship. Additionally, an estimated 13,000 lack access to any benefits or documentation. The bidun have no means to challenge the System’s decision, since the Kuwaiti judiciary does not rule on issues of nationality.
As with other issues, the government justifies the long-brewing bidun crisis with rhetoric about protecting limited state resources. After a 2011 Human Rights Watch report on the bidun criticized the system of legal discrimination, the Kuwaiti government promised a study by the Central System to evaluate “the impact of granting Kuwaiti citizenship to this class on the composition of the population, and the economic, educational and health cost for the government.” Yet the crisis of statelessness in Kuwait is less about an economic threat than a political one. The naturalization of the badu population in the 1960s and 1970s shows that the state is willing to expand citizenship when it is politically expedient for the ruling elite. One likely reason the Kuwaiti government has dragged its feet on the bidun crisis, at least since 2011, is the fear that a mass naturalization will expand the badu political opposition, which lately has championed bidun rights as part of its agenda.
Renegotiating the Social Contract
The nature of the Kuwaiti state, and the state-society relations it has created, has imprisoned the regime in an untenable mode of politics. As the exclusive distributor of resources to society, the state has fostered a largely passive and depoliticized form of citizenship, a social contract similar to other rentier states in the region. But Kuwait’s semi-democratic institutions have changed the expectations of citizens and non-citizens toward the government. Growing middle-class assertiveness — driven by the once marginalized badu — has increased class conflict, with overt opposition to those elites who secure a larger share of rentier rewards through outright corruption or their historical pact with the regime. Tribal-driven, youth activism has joined with long-standing middle-class opposition to test the parameters of the old social contract. The regime’s refusal to address the root causes of the issues of housing, foreigners and the stateless stems from the knowledge that doing so will undermine its elite base, which stands to lose from diversification of the economy and any further democratization of the Kuwaiti political sphere.
In this sense, the generation of fear about foreigners can be seen as a divide-and-rule tactic in response to the Arab uprisings by pitting citizen against non-citizen in order to counter rising citizen claims against the state. Yet the root of the problem is the underlying structural state dependency on petroleum export for revenues. The more diversified and open domestic economy Kuwait desperately needs would involve truly integrating these marginal groups into society — perhaps even opening the possibility for citizenship to them — and, as such, placing further pressures for democratization on an already strained political system.
In many senses, until recent protests, the stateless were a strategic political and economic asset just as the tribes once were. The costs of giving citizenship to the bidun might even be less than naturalizing complete foreigners, as government-employed bidun already receive benefits and pensions from their years as defense employees. Given consistent policy initiatives, particularly since 1989, to reduce the number of foreign workers in the country and replace them with Kuwaitis, it makes sense to hire long-time residents who consider themselves Kuwaitis, have Arab and Islamic cultural affinity, and might be inclined to take more menial, private-sector jobs that current Kuwaiti citizens might not consider. But solving the stateless crisis now has potentially intolerable political costs for the regime. After several years of Kuwait’s brutal crackdown on protesting bidun and decades of squeezing them out of state services, naturalizing this population may add to the enormous opposition faced by the Al Sabah.
Although it currently has few allies in Parliament, the opposition movement reflects deep, ongoing social change within Kuwaiti society that is likely to reshape and renegotiate the terms of the social contract of the rentier state and its accompanying strategies of rule.
 The National, October 28, 2013.
 International Monetary Fund, “IMF Country Report 13/336” (November 2013).
 Agence France Presse, July 3, 2014.
 Arabian Business, July 16, 2013.
 See Laura Jepsen, “Future Fiscal Tightening Forces Kuwait to Consider Welfare Reform,” Global Risk Insights, November 16, 2013.
 Agence France Presse, January 17, 2011.
 The diwaniyya (or majlis as it is called in other Gulf countries) is a traditional Kuwaiti semi-private place of meeting, which plays an important role in Kuwaiti politics as an extra-parliamentary space of gathering and free debate.
 Reuters, October 29, 2013.
 Delia Monacu, Andrea Baronchelli, Nicola Perra, Bruno Gonçalves, Qian Zhang, et al, “The Twitter of Babel: Mapping World Languages Through Microblogging Platforms” PLos ONE 8/4 (April 2013).
 Farah al-Nakib, “Revisiting Hadhar and Badu in Kuwait: Citizenship, Housing and the Construction of a Dichotomy,” International Journal of Middle East Studies 46/1 (February 2014).
 Alaan.net, August 7, 2012. [Arabic]  Kuwait Times, March 16, 2014.
 Gulf Business, June 15, 2013.
 Moheet.com, May 17, 2013. [Arabic]  International Monetary Fund, World Economic Outlook Database, April 2013.