THE TIMES KUWAIT REPORT
On 1 May, His HIghness the Crown Prince and Deputy Amir Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah dissolved parliament and ordered fresh elections to be held. The snap general elections held on 6 June to elect 50 members of the National Assembly were necessitated by the resignation of the sitting government, and the Constitutional Court’s ruling on annulment of the September 2022 elections. and reinstatement of the 2020 parliament.
The 2023 general elections, the third in as many years, was also prompted by the continuing political bickerings and institutional gridlocks that have become a staple of Kuwaiti politics in recent years. While some might be inclined to say that a raucous parliament and frequent elections are a manifestation of the vibrancy of democracy in Kuwait, there is no denying that the ensuing political instability has hampered the country’s growth and progress.
Political uncertainty has hindered economic diversification plans, delayed, if not, derailed critical infrastructure developments, discouraged private sector participation in the economy, and unnerved potential foreign investments. Parliamentary precariousness has also led to vacillating policies and indecisiveness, with top officials often postponing decisions on issues that need urgent redressal.
In an impassioned plea while inaugurating the first ordinary session of the 17th legislative term of the National Assembly on 20 June, His Highness the Deputy Amir and Crown Prince urged parliament members to cooperate and collaborate with the government, and to focus on reforms “for the sake of Kuwait” with the objective of meeting the aspirations of citizens and achieving a prosperous future for the country.
His Highness underlined that there was “no room for the waste of time” on conflicts and settling of scores, triggering crises and irresponsible practices, which were a source of dismay and an obstacle for achievements, and “we will not allow this to happen”. He added, “You should focus on boosting the supervisory role of the National Assembly, activate the legislative role to achieve aspirations of citizens, give the government enough time to implement its work plans, and wisely use the constitutional tools to maintain the genuine practice of democracy,”
A day earlier, addressing the newly formed cabinet, following their constitutional oath-taking before him, His Highness the Deputy Amir and Crown Prince called on the new government to address shortcomings, enforce state of law and institutions, promote justice and quality, and place the interest of Kuwait at the forefront and above anything else.
He also reaffirmed the importance of cooperation among state institutions as the “proper way to tackle major issues that concern the nation and citizens.” Speaking following the cabinet oath-taking ceremony, His Highness the Prime Minister Sheikh Ahmad Nawaf Al-Ahmad Al Sabah vowed that he and his cabinet colleagues would devote their experience and efforts to serving the nation, carrying out reforms and pushing forward comprehensive development in all fields, while sticking to the country’s constitution, its laws, and protecting the people’s freedoms, interests and funds. He also added that his government would have positive and constructive cooperation with the National Assembly.
Cooperation and coordination between the executive and legislative arms of government is imperative to passing laws and policies needed to resolve many of the challenges facing the country. Among the important files pending in parliament is the early approval of the draft budget for the fiscal year 2023-24, submitted by the government for parliamentary debate in February. It will be remembered that approval for the 2022-23 budget languished in parliament for nearly 10 months before it was finally approved by lawmakers in early November last year.
Finance Minister Manaf Abdulaziz al-Hajri, who has retained his portfolio from the previous cabinet, is eager to see the budget endorsed at the earliest, to facilitate planning and budgeting for projects in the next fiscal.The KD6.8 billion draft deficit budget envisages KD 26.3 billion in expenditure, including KD2.4 billion in capital spending, on an expected revenue of KD19.5 billion. Incidentally, nearly 80 percent of spending in the draft budget is on public sector wages, and state subsidies.
In an incisive report published last September on public sector wages and productivity, Al Shall Consultancy, a leading business and financial advisory firm in Kuwait, pointed out that although public expenditures have multiplied nearly six times over the past 20 years, there has been no concomitant progress in public sector productivity. Urging proactive policies aimed at sustaining public finance, the Consultancy noted that education, health services, infrastructure, housing and even the country’s cleanliness and environmental pollution are all worse today than they were when public expenditures were far less.
Another major financial issue awaiting ratification in parliament is the draft debt law that has been pending in the National Assembly since 2017. The debt bill which envisages a debt ceiling of 60 percent of GDP, would allow the government enough room for additional borrowing as the size of the economy expands in future. But lawmakers over the years have adamantly refused to pass the bill in its original or revised form, and have added restrictions on borrowing terms, such as on debt maturity periods, size of borrowing, and uses of financing among others.
Although there is general consensus between both sides in parliament on the importance of economic and financial sector reforms to the country’s future, the challenge has been in finding agreement on designing and implementing policies and programs that cater to the interests of all stakeholders, while ensuring sustainable, inclusive and equitable economic growth and productivity.
For instance, finding parliamentary consensus in implementing many of the reforms suggested recently by the International Monetary Fund (IMF), could prove challenging for both sides. The IMF report published in June, following the end of Article IV consultations with the authorities in Kuwait, had, among others, recommended enhancing tax revenue, rationalizing government expenditure and curtailing wasteful and unproductive spending.
The IMF also pointed out that improving tax receipts, which currently accounts for only a negligent portion of the total revenue, could help build a stronger non-oil revenue base that could then reduce the country’s vulnerability to oil price fluctuations. However, the very talk of taxes and rationalizing the profligate state subsidies are anathema to many lawmakers.
But it is not just financial issues that demand parliamentary cooperation for approval, other priority files include several vital reforms and policies critical to improving the overall economic and investment climate in the country. These include reforms aimed at greater privatization, improvements in business climate, and more public-private-partnership projects (PPP) to enhance competitiveness, encourage productivity gains, and attract investments.
Other policy reforms that will equally need parliamentary consensus to implement are reforms to the public sector, including rationalizing wages, achieving parity in salaries between different government entities, and filling top-tier vacancies in ministries and state bodies. But many of these changes are considered red-lines by MPs who vehemently oppose any reforms to salaries or subsidies.
Also, with youth accounting for the largest cohort of the population, their frustration at the lack of secure public sector job opportunities is a challenge that parliament will need to take up as a priority. Lawmakers who often make their way to parliament on promises of providing government jobs to nationals, are indifferent to the fact that the already bloated public sector is incapable of absorbing the thousands of young citizens entering the labor market each year.
In this regard and to its credit, in late May, the cabinet approved the formation of a committee tasked with creating job opportunities for national youth in the private sector, and assigned the Public Authority of Manpower (PAM), along with the Ministries of Finance, and of Commerce and Industry, to study the legal and financial aspects of handing out social allowance to young owners of microenterprises so as to encourage entrepreneurship among young nationals. Another sector that needs parliamentary buy-in to implement reforms is education. Raising the level of academic achievements, and enhancing pedagogy to regional and global standards, and providing training to youth so as to better match the skills they possess with the actual needs of the labor market, are vital to the country’s future. While both sides in parliament agree on academic reforms in broad terms, there is less agreement on the measures needed to achieve them.
With so many reforms and policy changes riding on achieving consensus and maintaining consonance in parliament, it is no surprise that all concerned parties have voiced support for the appeal made by His Highness the Crown Prince and Deputy Amir, at the opening of the latest session of parliament, for collaboration between executive and legislative members.
In his address at the inaugural session, His Highness the Prime Minister underlined the need for real partnership and cooperation in protecting the country’s unity, refraining from disputes, and de-escalating tensions between the executive and legislative authorities. The premier added that the government looks forward to a fruitful relationship with the new parliament.
He called on both sides to work together to reform the economy through executing laws that support monetary policy, in the light of the unstable conditions in international oil markets. “The upcoming phase is challenging and tough, thus serious cooperation between the government and the assembly is much needed to overcome these difficulties,” said Sheikh Ahmad in conclusion.
For his part, newly re-elected Speaker of the National Assembly Ahmad Al- Saadoun affirmed MPs’ desire to cooperate with the government to tackle agreed-upon issues to help attain aspirations of Kuwait’s people. The veteran legislator, who was speaking after he was elected uncontested to the Speaker’s post, also lauded the government affirmation of the willingness of ministers to cooperate with parliament. He emphasized the need to pursue coordination between the two authorities in parliament on agreed-upon proposals.
However, the bonhomie and promises of cooperation expressed by all sides at the inaugural session of parliament could evaporate if opposition lawmakers, most of whom were reelected in the latest polls, insist on passing a controversial bill that they had tabled in the previous session of the dissolved parliament. That bill had proposed the government take over consumer and personal loans of Kuwaiti citizens, a suggestion that the executive considered financially untenable. The ensuing impasse had led to the government tendering its resignation.
Despite everyone, from the leadership to the executive and legislative members stressing on the importance of the two arms of government working together to realize the expectations and aspirations of citizens, the million dinar question that arises is, will they? Since we have no crystal ball to predict the future, all we can do is wait and watch.
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