Kuwait’s new cabinet, parliament face tough task ahead

Sunday 18/12/2016
Kuwait’s Emir Sheikh Sabah Ahmad al-Jaber al-Sabah waving to members of parliament

London - Kuwait’s new parliament and cabinet face a tough task amid criticism of austerity measures and the return of Islamist-dominated opposition groups to the legislature.

Following a snap election over increases in petrol prices, Kuwait’s parliament has seen the return of opposition figures after a four-year boycott of the polls. Twenty-four of the Kuwaiti parliament’s 50 seats are in the hands of a broad opposi­tion faction that includes Islam­ist, nationalist and liberal figures, including members with ties to a Muslim Brotherhood-linked group.

“I am certain that your esteemed council and my brothers and sons, all citizens, realise that cutting pub­lic spending through careful meas­ures to fix the imbalance in the state budget, stopping waste and the bleeding of our national resources… has become inevitable,” Kuwait Emir Sheikh Sabah Ahmad al-Jaber al-Sabah said in his first statement before the new parliament.

Many of Kuwait’s new parlia­mentarians, particularly among the opposition, were elected on an anti-austerity platform, leaving observers wondering how the new legislature will seek to address the government’s economic policy.

Kuwait is trying to plug a $31 bil­lion budget deficit for the current fiscal year, which ends March 31st. It was the government’s austerity measures, particularly a controver­sial petrol price hike, that led to the recent political changes in the coun­try.

The new government, led by Prime Minister Sheikh Jaber al- Mubarak al-Sabah, who also headed the previous one, said it intended to push ahead with economic diver­sification plans but it was unclear whether it would follow the same line on austerity.

Prior to 2014, Kuwait generated about 95% of its income from oil. In recent years, the country has sought to diversify its economy, particular­ly following a massive drop in the global price of oil.

However, since the Organisation of the Petroleum Exporting Coun­tries (OPEC) decided to limit pro­duction at the end of November, the price of oil has stabilised, leading to hopes that an increase could help Kuwait deal more quickly with its budget deficit.

New Kuwaiti Oil Minister Essam al-Marzouk said he expected crude oil prices to climb to $60 a barrel. “This is a good price for us and will preserve production quotas for OPEC and non-OPEC members,” he said.

Marzouk previously held other high-level positions in Kuwait, including heading the country’s stock exchange. He replaced Anas al-Saleh as Oil minister. Saleh, who had the dual role of Oil minister and Finance minister in the previous cabinet, retained his role as Finance minister in the new one.

“Great responsibilities and ambi­tious economic aspirations sought by the homeland and our citizens are awaiting you, which requires tremendous efforts to be harnessed to speed up the pace of develop­ment in the country,” the Kuwaiti emir told new ministers.

It is the government’s economic reform plan and how the new par­liament responds to it that will de­termine whether the new govern­ment succeeds. Parliament is to discuss the economic reform pack­age on January 10th.

“The government may back down from more substantive initiatives, such as public sector pay reform, particularly if the oil price recov­ery is sustained,” a report by credit agency Fitch Ratings said after the Kuwaiti election.

“Nevertheless, it could still pur­sue some of its fiscal agenda with smaller, less contentious measures, for example enforcing existing sub­sidy rules or linking public sector bonuses to job attendance,” the re­port added.

Emir Sheikh al-Sabah dissolved parliament in October and called for new elections. “Due to the deli­cate regional developments and the need to face the dangers of security challenges, it became necessary to go back to the people… to elect their representatives,” he said.

The previous parliament had been preparing to question gov­ernment officials regarding auster­ity measures, particularly the rising price of petrol, before parliament was dissolved. Many observers ex­pect the new parliament to follow a similar course with regards to ques­tioning officials.