On the face of it, the resignation of the Kuwaiti government adds to the general sense that political risks in the Arab world are escalating once again. However, given that Kuwait is much wealthier than the likes of Egypt and Tunisia, and that its political process is amongst the most open in the region, we don’t think that the recent events will develop into a full-blown political crisis. In fact, the resignation of the government could ultimately raise hopes that Kuwait will begin to usher in much-needed economic reforms.
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