KUWAIT CITY: Kuwait’s Cabinet wants to pass its $5.15 billion stimulus bill as an emergency decree, bypassing Parliament, the finance minister said yesterday, as the oil-rich country’s economy stumbles amid the global economic crisis.
Mostafa Al-Shimali told Alrai daily that the worldwide crisis was affecting everybody, and the “economic situation as well as public opinion” were pushing for quick action.
In the latest sign of the country’s dire straits, the official news agency reported Kuwait’s 99 investment companies lost nearly $32 billion between August and January.
A third of what those companies once owned was now “gone with the winds” of the global downturn, the report added.
The finance minister said the package, the 2009-2010 budget and a capital market authority bill, will be on the agenda at the Cabinet’s meeting this week.
The ruler dissolved the legislature last week and called for new elections within two months, saying some lawmakers have abused democracy and stalled development. The country’s 1962 constitution gives the emir the right to legislate by decree on “necessary” matters when Parliament is not in session or dissolved. When the house comes back, however, it can vote down these laws.
The central bank unveiled its stimulus plan in February, but it had been held up in a parliamentary committee with some lawmakers complaining it did not abide by Islamic law.
Others have threatened not to approve it unless the government buys or reschedules billions in private debts owed by citizens.
The plan aims at helping struggling investment companies and offers bank loan guarantees.
The economy, which is solely based on oil revenues, has been struggling with fallout from the global crisis. The equity market has seen a drop of around 13 percent year-to-date, and two major financial institutions have defaulted on billions in debts.
Lawmakers have since December helped put the brakes on a $17 billion deal with US giant Dow Chemical and a project to build an oil refinery, damaging the country’s business reputation.