The finance ministry approved the disbursal this week following a June 1 request from the manpower authority, which said the payments were “to preserve the national employment gains in the private sector and enhance job security for this segment”.
Kuwait’s finances have been squeezed by the twin shock of the coronavirus pandemic and low oil prices.
Despite its vast wealth, the country could see its deficit widen to more than 11% of gross domestic product (GDP) this year from a 4.8% surplus last year, the International Monetary Fund has estimated.
Kuwait will disburse some 240.5 million dinars ($780 million) to support Kuwaiti citizens employed in the private sector as part of efforts to soften the impact of the coronavirus pandemic, the finance ministry said.
The Public Authority for Manpower will transfer sums to Kuwaiti business owners and private sector employees for six months effective from last month.
Only around 70,000 Kuwaiti citizens work in the private sector, where most employees are foreigners. As companies have laid off large numbers of foreign workers, the government has sought to retain Kuwaitis.
Most Kuwaitis work in the state sector, which has not experienced mass layoffs during the coronavirus crisis. Kuwait, like other oil-dependent Gulf monarchies, has long tried to encourage more of its citizens to accept private sector jobs, and gives such workers extra government benefits.
A government official said last month Kuwait is considering making an annual 10% transfer of state revenue to its wealth fund conditional on budget surpluses as it seeks to bolster its finances.
The country is unable to tap the international debt markets due to parliamentary opposition to a debt law proposed by the government.
Kuwait recently reported 915 new COVID-19 cases and two more deaths, raising the tally of infections to 43,703 and the death toll to 341, the Kuwaiti Health Ministry said in a statement.
The new cases included 492 Kuwaiti nationals and 423 residents of other nationalities, the statement said.
Currently, 9,393 patients are receiving treatment, including 162 in ICU, according to the statement.
The ministry also announced the recovery of 602 more patients, raising the total recoveries in the country to 33,969.
Recently, the nation decided to start the second phase of restoring normal life. The second phase will began on June 30 and will last for three weeks.
In the second phase, public and private sectors will resume work with less than 30 percent capacity, in addition to the resumption of operation in shopping malls, financial sector, construction sector, retail shops, parks, and pick-ups from restaurants and cafes.
Kuwait and China have been supporting each other and cooperating closely in combating the COVID-19 pandemic.
Kuwait donated medical supplies worth $3 million to China at the early stage of the COVID-19 outbreak, while China has been facilitating the procurement of medical supplies by Kuwait.
On April 27, a team of Chinese medical experts visited Kuwait to assist the Gulf country’s anti-coronavirus fight, through sharing with Kuwaiti counterparts their experience and expertise in the prevention, diagnosis and treatment of COVID-19.