Kuwait's government must work harder to pass privatization bill: economists
Kuwait's government must work harder to convince bickering lawmakers of the urgency of passing a privatization bill heralded as a crucial step for long-awaited economic reforms, an economist said Thursday, December 5.
"Some implications of the (privatization) law are unpopular," said Jassim Al-Saadun, who heads the independent Al-Shall Economic Consultants. "The government itself has to believe more in the law and convince people that it really will control prices and stop corruption," once the law is passed, Saadun told AFP.
Kuwaiti MPs were so roused during this week's parliamentary discussion on the bill that veteran liberal MP Abdullah Al-Nibari was reduced to tears during a raging row with tribal MPs over protecting the national workforce, a major sticking point delaying the law's passage.
The fears of the Kuwaiti workforce were justified, according to Saadun, and "the government needs to work on three fronts" to confront them. The government "has to show the public that whether we like privatization or not, we have no choice. Unemployment will be so high in a few years time, and we can't bear the burden on public expenditures." The government also has to work together with parliament and take MPs' opinions into serious consideration, he added.
"Thirdly, the cabinet has to believe in the law and work as a team to demonstrate honesty and credibility." The privatization bill, first proposed in 1992, is considered a key part of legislation paving the way for much-needed economic reforms in Kuwait. 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).
"How can we link our destiny to oil prices when they are out of our control?" Finance Minister Yussif Al-Ibrahim asked parliament on Tuesday. "We need economic reform, we have to start it immediately, we cannot continue in this way," Ibrahim warned. Kuwait has already passed legislation to allow foreigners to own stocks listed on the emirate's bourse as well as two other laws allowing direct and indirect foreign investment.
Last February, parliament's economic and finance committee approved the privatization bill after introducing a new clause to safeguard the rights of Kuwaiti employees in privatized services. Nevertheless, people's reservations about the draft still focus on losing their jobs through certain people "buying Kuwait" and on monopolies and corruption.
"The bill will sell the whole country," warned veteran MP and former four-time speaker Ahmad Al-Saadun. "We must not allow the one who wants to control the country to present it first. There will be people who own everything and people without a job. Some won't have the chance to find a job," he said.
Under the new clause, Kuwaiti employees would retain the right to a five-year contract with the new private owners at full salary and other benefits. 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.
"We don't want to sell the public sector to a few people. We don't want capitalism or a monopoly, but we should tell the people that we have to shift from a reliance on oil," said liberal MP Ahmad Al-Rubei. "We shouldn't kill this ambitious project because of past mistakes," he added.
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. — (AFP, Kuwait City)
by Fiona MacDonald
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)