The number of foreigners terminated from public sector jobs in Kuwait has left banks in the country with a sizeable bad debt problem.

Local media said that Kuwait’s efforts to create more jobs for nationals by releasing foreigners has created a problem when thousands of laid off expatriates became unable to fulfill their financial obligations towards local banks.

Kuwait Times reported recent data from the Central Bank of Kuwait that shows the total bad debts for expatriates during the past four years reached $1.8 billion, a sizable portion of which comprise the debts of foreigners who were laid off by the government, according to sources.

Eighty five percent of those debts are owed to local banks, while the remaining 15 percent are owed to financial facilities companies.

According to official statistics released by the Central Statistical Bureau and Civil Service Commission, the number of expats in the public sector dropped to 80,000, compared to around 340,000 Kuwaiti employees as of the end of June.

Also, over 1,600 expatriate workers were terminated from public sector positions in Kuwait so far this year, according to Kuwait’s Civil Service Commission (CSC).

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