Kuwaiti parliament panel approves privatization bill
Parliament's economic and finance committee Sunday, February 11, approved a draft bill that allows the Kuwaiti government to sell state-run services to the private sector, the committee's chairman said. The approval came after the seven-member panel introduced a new clause to safeguard the rights of Kuwaiti employees in privatized services, the main stumbling block for the legislation, Abdel Wahab al-Haroun said.
Kuwaiti employees would retain the right to a five-year contract with the new private owners with full salary and other benefits. The new legislation needs to be approved by the house and endorsed by the cabinet to become law.
More than 93 percent of the 200,000-strong Kuwaiti labor force is employed by the government, which provides high salaries, generous pensions and fewer working hours than the private sector. MPs have been concerned that once public services are privatized, the new owners may hire more experienced foreign workers who would accept much lower pay than Kuwaitis.
The draft bill will facilitate the sale of public services such as electricity, communications, public works and other services worth several billion dollars to local and foreign private investors. Kuwait has already passed legislation to allow foreigners to own stocks on the emirate's bourse, and parliament is debating another draft bill to allow direct foreign investments.
About 90 percent of the emirate's total income comes from oil revenues and the state hopes to energize the private sector, which contributes less than 25 percent of the Gross Domestic Product (GDP). The privatization bill is considered a key legislation for economic reforms in Kuwait. —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)