In recent decades, the Gulf states, namely Saudi Arabia, Qatar, and the United Arab Emirates, have adopted a distinct economic and political model that combines a level of economic openness and internationalization with strict autocratic governance and surveillance. This adaptive framework has fostered dynamic change and long-term vision, fueled by substantial energy revenues. Within the past few years, several Gulf countries have initiated elaborate capital investment plans to develop new industries and cutting-edge technology, have taken steps toward normalization with Israel, and have pursued multi-billion-dollar investments in foreign countries, including the United States. Among the Gulf countries, however, the State of Kuwait has remained a notable outlier. Kuwait possessed a comparatively peripheral role in the region: Its representative parliament and undiversified economy have placed the country on a different trajectory from its peers, as it has sought to maintain regional neutrality with limited development of non-oil industries. This distinction was evidenced by Kuwait’s absence from US President Donald Trump’s recent visit to the region in May 2025. However, Kuwait’s reputation for regional discretion and non-conformity has largely obscured recent actions by the government to restructure the political and economic composition of the country in ways that will likely have a veritable impact for decades to come.

Suspension of Parliament

 On May 10, 2024, Kuwaiti Emir Mishal Al-Ahmad Al-Jaber Al-Sabah issued a royal decree suspending both the National Assembly of Kuwait and seven unspecified articles of the 1962 Kuwaiti Constitution, granting him complete control over the government. This decision was made only a few months after the emir was instated in December 2023, following the death of his predecessor and half-brother Emir Nawaf Al-Ahmad Al-Jaber Al-Sabah. At his swearing-in, pledged to rectify the corruption and gridlock that had plagued Nawaf since the latter took the throne in 2020, preventing his government from enacting economic reforms. Before the suspension, Mishal had already dissolved the National Assembly on February 15, 2024, citing the “breaching of constitutional principles” by members of parliament and their deliberate use of “offensive language” amid growing tensions between elected officials and his ministers. He approved a draft decree that was submitted by his cabinet on February 27, setting the date for snap parliamentary elections for April 4 of that year. Despite his hopes that the move would foster reform, a 62.1 percent voter turnout elected a parliament similar to the previous one, with the pluralistic opposition occupying twenty-nine of the fifty total seats. Frustrated with the lack of change, Mishal decided to suspend the newly elected parliament, an action he deemed necessary to “save the country and secure its highest interests,” as he blamed political gridlock for obstructing crucial economic reform and development. The emir has since been ruling Kuwait by decree, free from parliamentary restriction.

Kuwait has historically championed the most representative political system among the Gulf states. Unlike other parliamentary bodies in the region that are appointed or limited to advisory power, the elected National Assembly of Kuwait can propose, amend, and pass legislation for approval by the emir. It also has the right to debate and approve the national budget, can force government ministers (including the prime minister) to appear before it through interpellation, and initiate votes of no confidence against the emir’s appointees. Throughout his tenure, the emir has exhibited frustration with the parliament’s obstruction of what he believes are essential economic reforms.

For example, the National Assembly has repeatedly blocked legislation for a new public debt law since the previous one expired in 2017, preventing Kuwait from issuing sovereign debt and accessing international capital markets. This represented the end of a previous pattern of renewals to the national debt law, thus forcing the already-strained General Reserve Fund to cover deficits, limiting the potential for capital expansion. The parliament also defied the Gulf Cooperation Council (GCC) Value-Added Tax Agreement of 2017 by resisting pressure from the government and other GCC member states to institute a trade-neutralizing value-adding consumption tax, citing fears of inflation and public backlash. Other points of frustration have included the Assembly’s prevention of public-sector wage cuts and subsidy reduction, as well as parliament’s refusal to approve the emir’s Crown Prince appointees without demanding concurrent concessions. In addition, the frequent interpellations of ministers have dissuaded many from pursuing reform, thus fostering further political paralysis. This trend contributed to ten cabinet resignations and four parliamentary elections between 2020 and 2024.

Mishal stated that the suspension would last for up to four years, suggesting a potential restoration of parliament and constitutional articles by May 2028. He also pledged to create a constitutional review committee within six months of the suspension to propose reforms that would be approved by a future parliament or public referendum—over a year since the suspension, no such committee has been formed.

The Forgotten Gulf State

Remarkably, the suspension of the elected body of what has historically been the most politically representative nation in the Persian Gulf received little international attention. The United States government has issued no official comment condemning or endorsing the emir’s actions, with one anonymous State Department official merely stating upon inquiry that the United States is “aware of the developments regarding the Kuwaiti parliament suspension and are monitoring the situation closely.” There was a similar lack of response from other GCC countries with the exception of Emirati President Mohammed bin Zayed, who reportedly praised Mishal’s actions in a private phone conversation, emphasizing the importance of government stability.

Despite its role as the fifth-largest oil producer in OPEC and its possession of the world’s fourth-largest sovereign wealth fund, Kuwait has remained on the periphery of mainstream international discourse concerning the Persian Gulf for the past three decades compared to other countries in the region. Much of this discrepancy in attention can be attributed to the effects of a shift in public priorities in the country following the Iraqi invasion of 1990.

Before the invasion, Kuwait’s foreign policy resembled that of its Gulf peers, championing a dynamic role in regional affairs. The country’s oil revenues and relatively liberal business climate attracted considerable foreign investment and partnerships in the private sector. Kuwait was also among the major financiers of Iraq during the Iran-Iraq War of 1980 to 1988, giving the former several billion worth of US dollars as a means of combating Iranian influence. Two years later, however, former Iraqi President Saddam Hussein would launch a devastating invasion of his previous source of war funds.

The irony of indirectly funding Iraq’s invasion, coupled with the substantial cost of reconstruction, imparted a national trauma upon Kuwait that gave rise to profound nationalism and localism, which would influence conservative voting trends for subsequent decades. This led Kuwait to adopt a more cautious and limited foreign policy, acting as a neutral mediator among the GCC, remaining mostly concerned with its own security.

According to Gulf expert Dr. Eran, “Between 1961 and 1991, Kuwait had a somewhat similar policy to nowadays Qatar… Since then (Iraq’s invasion), Kuwait has changed course. Some relate it to the feeling that spending money everywhere—including helping Iraq in billions—did not help, some relate it to the enormous costs of rehabilitation, internal infighting, the semi-democratic nature of Kuwait that prevents swift decisions, et cetera. It seems that Kuwait preferred to keep a low profile and, in view of the growing tensions inside the GCC over the last decade, to focus on regional mediation only.”

Kuwait’s inward-focused neutrality, perpetuated by parliamentary conservatism, has caused the country to become largely excluded from discourse concerning the region. For example, Kuwait remained a neutral intermediary in the 2017 Saudi-led embargo against Qatar and in subsequent regional postures against Iran. In addition, the country’s status as a major non-NATO Ally, and a strong US military presence, coupled with its traditional reputation for the stability of its semi-democratic constitution, has likely created a perception among international observers of Kuwait’s comparative constancy that has allowed the country’s recent political overhauls to be overshadowed by other Gulf developments, such as the expansion of the Abraham Accords, the announcement of large capital investment projects, hostility and rapprochement with Iran, and security considerations as a result of the ongoing conflict in Yemen.

Economic Perils

Kuwait’s economy is dominated by its energy sector, which accounts for over half of the nation’s GDP, 95 percent of its exports, and over 90 percent of its total government revenue. The country’s overreliance on its oil industry was exposed by the OPEC+ production cuts of 2 million barrels a day that began in October 2022. According to the IMF’s Article IV consultation with Kuwait, the country suffered a recession of 3.6 percent of real GDP in FY2023, with a 4.3 percent decline in the oil sector and a 1 percent fall in the non-oil sector for that year. In comparison, Saudi Arabia’s economy weathered a much less severe 0.8 percent contraction despite a 9 percent oil sector decline, due to its robust economic heterogeneity. While OPEC began to unwind the cuts as of April 2025, the recession highlighted Kuwait’s critical need for economic diversification, as the oil sector is only projected to expand by 2.5 percent in 2025.

Like other GCC states, Kuwait’s oil industry has been entirely state-owned since the government nationalized reserves in 1975 under the Kuwait Petroleum Corporation. This has enabled the government to crowd out private development, with 85 percent of the population employed in the public sector, which includes oil. About 80 percent of the national budget is spent on wages and subsidies, leaving only about 9 percent for capital investment. The country also faces numerous structural issues, including a reliance on migrant labor, as the Kuwaiti education system does not adequately produce enough skilled workers for the private sector, with most graduates finding employment in the government or seeking higher education. Kuwait also has an immense portion of young nationals, with a median age of twenty-one, who require expanded funding for education.

The Kuwaiti parliament has been disinclined towards economic reform, as it blocked multiple proposals to renew national debt laws to finance development. Kuwait’s initial debt laws were passed during periods of high oil prices prior to 2014, when debt was viewed as a strategy to fund investment as a supplement to an ample General Reserve Fund, as opposed to a necessity to cover deficits. As oil prices collapsed from 2014 to 2020, Kuwait encountered resulting deficits, and debt was used as a means of covering salaries and operating costs, which members of parliament deemed unsustainable. The post-2016 elections saw the election of several populist members of parliament who earned the support of constituents by vowing to defend public jobs and subsidies. The National Assembly also cited concerns over a lack of transparency, fearing that borrowed funds would be misused or that the government would fail to address structural issues. This fueled a liquidity crisis, with warnings that the government would struggle to meet obligations, including employee salaries.

Furthermore, burdensome corporate tax, ownership restrictions, and a challenging bureaucracy have succeeded in deterring foreign direct investment (FDI), which accounted for only 0.4 percent of GDP in 2022, making it among the lowest in the GCC. The limited size of the private sector has also been a motive for deterring foreign competition.

The Emir’s Reforms

Since assuming absolute power over a year ago, Mishal has proceeded with several measures that would not have been possible with the National Assembly’s check on his power. On June 2, 2024, about a month after he suspended parliament, the emir appointed his nephew, Sabah Al-Khalid Al-Hamad Al-Sabah, as Crown Prince—his successor—after general speculation that parliament would not approve his nomination without government concessions. This was legally possible as Mishal had also apparently suspended Article IV of the constitution, which requires parliament’s approval of the emir’s Crown Prince nomination. The choice of Al-Khalid is significant, as it represents the first time that a crown prince was selected from the Hamad branch of the Mubarak line, as there had been a precedent of alternating between the Jaber and Salem branches. Al-Khalid had an extensive career in Kuwait’s Foreign Service and served as Prime Minister for over two years, leading the country through the COVID-19 pandemic and considerable conflict between the parliament and the government. His connections to the Jaber branch of the family by descent and his marriage into the Salem branch have the potential to foster greater unity among successive monarchs of the turbulent royal family.

The emir also took action to revoke citizenship for tens of thousands of Kuwaitis, with higher estimates of up to 42,000—about 2.7 percent of Kuwait’s 1.55 million citizens, of its total population of 5.1 million—in his effort to restore the population to its “rightful people, clean and free of impurities.” The majority of those targeted include women naturalized through marriage—particularly divorcees and widows—political opponents, tribal figures traditionally linked to opposition blocs, and dual nationals. Such actions shrink the electorate in a way that targets the opposition. According to Middle East Institute Senior Fellow Brian Katulis, the emir’s actions are also likely a means of reducing the burden of the government’s welfare payments, as the country is known for its extensive social services offered to citizens. He added that the revocations were supported by popular nationalist sentiments in the country.

In March 2025, the emir set a debt ceiling of KD30 billion ($97 billion) and allowed bond maturities of up to fifty years. This measure has enabled him to pursue substantial capital investments in pursuit of the previously inhibited Vision 2035 development project, by which he intends to transform Kuwait into a financial, commercial, and cultural hub in the region by supporting economic diversification, exploring new industries, and inviting FDI. This plan includes several economic reforms and initiatives, including the expansion of bilateral economic coordination with China and Japan, the pursuit of expanded infrastructure projects, and the exploration of renewable technology and environmental initiatives.

Vision 2035 mimics similar capital projects from other Gulf countries, such as Project 2030 in Saudi Arabia, “We the UAE 2031” in the United Arab Emirates, and Qatar National Vision 2030, among others, which aim to foster economic diversification and limit reliance on oil. Mishal’s plans involve a concurrent expansion of oil output from 2.8 million barrels per day (bpd) to between 3.5 and 4 million bpd by 2035 to 2040 as a means of financing the project. This involves a US$30 billion investment in exploration, field development, and infrastructure upgrades, as the state-owned industry plans to exploit offshore reserves and increase production in the Partitioned Neutral Zone shared with Saudi Arabia, while also modernizing relevant infrastructure. While Kuwait aims to expand the private sector, it is also committing to the assumption that there will continue to be a large market for oil in the coming decades, as the country has among the lowest costs of oil production in the world.

Steps Towards the “Gulf Model?”

 As a semi-democratic constitutional emirate, the State of Kuwait has maintained political and social distinction from its regional peers since its independence in 1961, as the elected National Assembly has considerable powers not found in other Gulf states. The democratic tradition of Kuwait effectively enabled the people to use parliament to resist the “Gulf model,” which has become definitive of other GCC states. This is characterized by streamlined economic development through privatization, FDI, and globalization under an authoritarian government that maintains strict control over civil society. Particularly since the Gulf War, Kuwaitis have been reluctant to follow this model in favor of greater political autonomy and have even inspired certain GCC members to pursue greater political liberalization after the Council united in support of Kuwait against the Iraqi invasion.

The economic challenges faced by Kuwait reveal the importance of industrial development and diversification. Such was part of the justification behind Emir Mishal’s authoritarian actions. The public response has been muted, with limited visible opposition or protest a year after parliament was suspended, with many acknowledging the former inefficiency of the National Assembly since its suspension. The emir’s actions in suspending parliament and the constitution, revoking citizenship, and pursuing direct economic development in pursuit of Vision 2035 suggest that he may be leading Kuwait to a closer resemblance to the Gulf model. Even if and when parliament is restored, Kuwait will likely bear a closer political and economic resemblance to other Gulf states with an amended constitution and extensive economic reform, but should remain uniquely constitutional compared to its peers.

Israel and Iran

The emir’s reforms suggest that Kuwait is capable of change in accordance with other GCC norms. This raises the question of the future normalization of relations with Israel, as was done by Bahrain and the United Arab Emirates under the Abraham Accords of 2020. Other countries like Saudi Arabia, Oman, and Qatar developed more informal Israeli relations with potential for further progress in the future. Kuwaiti officials have remained adamant that Kuwait will be the last country to normalize relations on account of its historic support for Palestine. Katulis suggested that should other Gulf states—particularly Saudi Arabia—make future progress toward normalization with Israel, it is possible that Kuwait could follow suit after the Israel-Hamas conflict subsides.

Like its Gulf neighbors, Kuwait remains cautious of Iran as access to the Strait of Hormuz remains vital for the country’s oil exports. Kuwait’s neutral stance in the region, however, continues to apply in the recent Israel-Iran conflict, regardless of its antipathy for the two nations. It insists that any future US strikes against Iran not be launched from bases in Kuwait out of fear of retaliation, and it is likely that Kuwait will strive to remain neutral on the issue, despite Iran’s retaliatory strike on the US base in neighboring Qatar in May 2025. Kuwait also has a relatively large number of compared to other Gulf states, as Shias comprise up to about 30 percent of the citizen population, thus bearing some inherent spiritual ties to the majority-Shiite Islamic republic.

Conclusion

Kuwait’s representative constitution, which distinguished it among Gulf states, has paradoxically fostered political dysfunction and gridlock that have allowed the nation to fall into comparative obscurity in the GCC. The political consequences of the Iraqi invasion, coupled with structural economic issues such as an overdependence on oil, have stalled government attempts at reform to the point where Emir Mishal saw it necessary to suspend the National Assembly and enact change through royal decree. While the emir’s actions were largely overshadowed by other regional developments, unresisted political, economic, and social reform may succeed in returning Kuwait to the center of Gulf dynamics. While it is likely that the National Assembly will eventually be restored after constitutional revision, such amendments may institutionalize a new national trajectory for Kuwait similar to that of its regional peers, as Kuwait strives to harmonize Gulf-style development with its representative political tradition.

Image: Adobe Stock