A Parliament packed with lawmakers who oppose wage cuts and taxes, and who want to keep Kuwait’s sumptuous welfare state intact, is threatening the government’s attempts to close a gaping budget deficit.
Opposition candidates won about 24 out of 50 seats last month in a parliamentary election seen by Kuwaitis as a referendum on austerity measures aimed at dealing with the 2016/17 shortfall, forecast at 9.5 billion dinars ($31 billion).
Citizens of Kuwait, one of the world’s wealthiest, have bristled at recent fuel subsidy cuts and utility price hikes that the government pushed through the outgoing Parliament with relative ease. But the new lawmakers say they are determined to protect basic services and jobs in a public sector, which employs more than 90 percent of workers.
Governments across the Gulf — also trying to rein in spending in an era of flagging oil prices — are watching closely as the government tries to pass more reforms, including taxing corporate profits and cutting government wages and benefits.
Kuwait’s opposition, which includes the Muslim Brotherhood, liberals, tribal representatives and independents, say the government should trim other costs first, including what it calls “wasted expenses” such as an overseas medical allowance.
By law, Kuwaitis, who enjoy the fourth highest gross domestic product per capita in the world, can travel abroad for specialised medical treatment at the expense of the government. Opposition figures elected to the Assembly say the allowance, which costs an estimated KD 760 million a year, is used to line the pockets of people with ties to government.
“The Assembly wants the government to rationalise unnecessary expenditures before heading to the citizen,” investment fund Kuwait Farabi’s CEO, Fouad Al-Hadlaq, said. “The MPs were saying in their campaign ‘we have no problem to pay money but we are not first in the line .. We want to see a rationalisation from the highest (levels of officials)’.” Kuwait’s Minister of Health, Ali al-Obaidi, has denied accusations that government officials siphoned off public money through contracts related to overseas medical treatment. He says a number of medical offices are to blame for “reported irregularities”, according to a statement carried last month by state news agency KUNA.
Kuwait spends KD 2.9 billion on subsidies, or about 15 percent of 2016/2017 public spending, down from 3.78 billion last year, according to the finance minister in January.
Kuwait’s Parliament, a rare check on the power of a Gulf ruling family, has the right to grill government ministers, including the prime minister and block legislation and is frequently at loggerheads with the Cabinet. The government has had a rare smooth ride since 2012, and has been trying for years to approve a new strategy aimed at diversifying the economy away from oil.
The strategy — know as “The Economic Reform Document”, is an attempt to redraw the state’s role in the economy, increasing the role of the private sector, trying to get citizens to invest in public projects and reforming the labour market. “Theoretically, the document is positive. … But, practically, the acceptance of it by the representatives of the Kuwaiti people is difficult, because there is waste in other things,” Al Joman Center for Economic Consultancy general manager Naser Al-Nafisi said, calling the amount spent on foreign medical treatment “an astronomical figure”.
“How the government saves 150 million dinars from raising fuel prices that impact on every citizen … and keeps quiet about the waste of 600 million dinars? This is not reasonable. The government is contradicting itself,” he said. The impasse has implications for Parliament too, however. The constitution gives the Emir of Kuwait the right to dissolve the Parliament. During the past ten years, since Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah came to power, none of the Parliaments has completed its constitutional 4-year term. “It is impossible for the government to move ahead with the austerity programme. And if the government insisted and wanted to face (Parliament), this will only bring about the destruction of Kuwait,” Kuwaiti Murabahat Investment’s Executive Vice-President, Asset Management, Muhannad Uthman Al-Mesbah said.
In the meantime, MP-elect and opposition member Jamaan Al-Harbash has asked HH the Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah to refrain from reappointing ministers who failed to manage their ministerial portfolios as their return to the Cabinet might lead to political crisis.
He appealed to the government and its head to show good faith and extend a cooperative hand to the legislature in order to serve the interests of the people, citing the amendment of important legislation like the Citizenship and Election laws. He explained that revision of the Citizenship Law is necessary in order to avoid turning the nationality issue into a political blackmailing tool and to prevent political isolation. He also stressed the need for the government to present clear and plausible plans, pointing out that isolation and mistrust will not lead to stability. He said the pockets of citizens are considered a red line and it is now time for the government to lift the suspension of Kuwaiti sports.
Furthermore, MP-elect Al-Hamaidi Al-Subaie called on His Highness the Prime Minister to have a government lineup which matches the parliamentary election results. He considers these results a clear indication that Kuwaitis want to reclaim the constitutional and legal rights stolen from them. He added the people want development without corruption, justice without favoritism, protection of public money, pursuit of those who misappropriated public funds, and activating the role of the private sector. He added the work program of the new government must match the ideas of lawmakers to address key issues.
Meanwhile, MP-elect Faisal Al- Kandari stressed the need to hold Public Works Ministry officials responsible for the scattering of stones and gravel on roads. He asserted the officials’ failure to address this problem means corruption continues due to the unscrupulous acts of some people. “We will take action against the incoming minister if he does not solve the problem. The new minister must impose penalties on companies that caused the problem and refer them to court while the concerned officials should be held liable,” he concluded.
Source: Arab Times