The decision by Kuwait’s National Assembly (parliament) on 6 December to force the government to forgive KD1.8bn ($6.3bn) of interest payments on loans held by the country’s citizens is short-sighted at best.

The effort to provide short-term economic relief to the country by writing off personal loans – the third time it will have happened in as many decades – is only likely to encourage Kuwaitis to be more economically reckless.

The government has rightly promised to reject the law, particularly because there are other measures it can take to prop up the economy, which will provide far greater long-term benefits to the country.

“A diverse economy, in which construction and oil did not play such a predominant role, would be the ideal outcome”

Unexpectedly robust oil prices should ensure there is overall economic growth this year and will mean the government has plenty of money to spend to support the non-oil economy. The simplest way to do this is to pump-prime the economy with public works, such as power stations, ports and hospitals.

Kuwait, which has more projects stuck on the drawing board than most, is increasingly taking this approach. It is moving ahead with the long-delayed project to build the Subiya causeway and is also making progress on a number of other major infrastructure schemes, such as the expansion of Kuwait International airport, and the construction of a new port on Bubiyan Island.

This spending is not just a hand-out for the construction industry. In the short term it will help to stimulate the economy, and in the long term it will mean that Kuwait’s infrastructure is prepared for economic recovery.

A diverse economy, in which construction and oil did not play such a predominant role, would be the ideal outcome, but in the meantime the spending programme makes sense. It is certainly more worthwhile than another unwarranted bail-out of citizens’ debts.