Politics choke Kuwait's growth prospects
Kuwait's political environment is hindering national economic growth, say top politicians and industry officials.
As Europe and the United States worry about rising debt levels, Kuwait has had a record budget surplus of 13.2 billion Kuwaiti dinars (Dh171.78bn) as key decisions on infrastructure and government spending get sidelined amid wrangling between the elected parliament and the appointed government led by the Al Sabah ruling family.
"The government is fed up with the opposition, which is bigger than the government, they are a majority and can grill any minister and even the prime minister himself," said Amal Al Mutawa, a minister of parliament at the cabinet in Kuwait City.
"The economy is in a state of dysfunction. The stock market is down. There is lots of money but no proper implementation of this wealth. At the end, it comes to the fact that the government cannot take decisions."
Kuwait has not endured protests as with some other places in the region but there has been tensionsince December, when the country's emir, Sabah Al Ahmad Al Jaber Al Sabah, dissolved the parliament elected in 2009 amid corruption allegations.
Elections were held in February, in which Islamist opposition members won the most seats. But in June, the constitutional court again dissolved the parliament after it ruled the most recent election wasillegal. Kuwait has had eight governments over a period of six years.
The Kuwait Stock Exchange General Index has underperformed its Arabian Gulf peers, down 1.6 per cent so far this year to trade at about 5720 points.
The nation's budget revenue was 30.24bn dinars, which includes oil revenues of 28.57bn dinars. But spending was 17.01bn dinars, the second-lowest in 10 years, according to forecasts by the National Bank of Kuwait.
"The stalemate between the government and parliament is the single-largest reason for the stagnation of the Kuwaiti economy, for the lack of movement in fixing the economy and ultimately halting economic development," said Abdul Aziz Yaqout, the legal adviser for the Capital Markets Authority and the privatisation committee for the Kuwait Stock Exchange.
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Updated: August 22, 2012 04:00 AM