Kuwait's parliament is trying to restrict the cabinet's ability to impose new fees on citizens and reduce price subsidies, an effort that threatens government plans to strengthen state finances in the face of low oil prices. Opposition candidates won about 24 out of 50 seats in elections last November that were seen by many Kuwaitis as a referendum on austerity measures. That gave the opposition more power to oppose government initiatives.
On Tuesday, Safa al-Hashem, a spokesman for the National Assembly's financial and economic committee, said members of parliament had proposed cancelling a law passed by the previous assembly which ratified a rise in electricity and water tariffs.
MPs also proposed a measure confirming the right of the National Assembly to regulate and approve any move by the government to impose fees. The measures would constrain government efforts to save money by reducing energy subsidies and increasing non-oil revenues. A victory by parliamentary opponents in these areas could help them block other austerity plans, such as a drive to reform public sector wages.
Hashem, speaking to reporters after the committee met with Finance Minister Anas al-Saleh, said Saleh considered the two proposals to be legally and constitutionally flawed, and asked for two weeks to respond to them. Saleh was not available to comment on Tuesday. One of the Gulf's richest countries, Kuwait is better able than most to cope with an era of low oil prices.
Nevertheless, the International Monetary Fund estimated in a report this month that including the government's investment income and before transfers to the sovereign wealth fund, its fiscal surpluses had vanished because of shrunken oil income.
Both the IMF and government officials have said austerity steps are vital to prevent large deficits from emerging in future as Kuwait's population grows.
Source: Arabian Business