The Social Affairs Ministry is preparing to roll out a major overhaul of Kuwait’s cooperative societies, which includes restructuring jobs, expanding benefits for shareholders and introducing a rewards system that will include expat shoppers. The reforms come as the ministry continues a wider effort to strengthen oversight of Kuwait’s cooperative sector, which accounts for more than 70 percent of the country’s retail market. According to Al Jarida, the ministry has referred 254 cooperative board members and employees to investigators over the past two years, dissolved 12 cooperative boards and a cooperative union, and formed more than 100 committees to review the operations and finances of cooperative societies.

Acting Assistant Undersecretary for Financial and Administrative Affairs and Cooperative Affairs Dr Sayed Eisa said the reforms are designed to improve administrative efficiency, create fairer workplaces and better organize the sector. “The Ministry of Social Affairs is moving forward with developing the cooperative sector by restructuring jobs and adopting a salary scale that matches the size and revenues of each cooperative society,” he told KTV. “This is a step aimed at organizing the work environment.”

Eisa said the ministry found significant waste when reviewing the financial statements of some cooperative societies, pointing to duplicated and unnecessary positions that increase payroll costs. “When we look at a cooperative society’s financial statements at the end of the budget year, we see significant bloat and financial drain because there are many repeated and similar job positions,” he said. “Once these are reorganized using a proper scientific and technical approach, the cooperative society will save substantial amounts that are currently being spent on unnecessary salaries.”

The regulations will also introduce financial incentives aimed at improving consumer experience. For the first time in recent history, expats will now be eligible for a points system, allowing them to get points on three percent of their spending at cooperative societies. “We added two benefits for shareholders,” he said. “First, we raised the maximum purchase dividend from 12 percent to 15 percent. Second, just as we gave expatriates reward points, we also gave Kuwaiti shareholders additional points that they can use for free purchases inside the cooperative society, based on the value of their purchases, up to a maximum annual purchase amount of 10,000 dinars,” he added.

Beyond administrative and financial changes, the ministry’s plan for the coming year includes a vision for the physical transformation of cooperative spaces. This includes developing central markets to give them a “distinct architectural identity.” The social affairs ministry will also introduce a new mechanism for organizing and managing investment shops located within cooperative societies. Eisa said the ministry will work with cooperative boards to implement the restructuring and salary scale without placing additional financial burdens on the co-ops.