Kuwait fights budget deficit: Reexamining government salaries, expatriate labor

Published February 16th, 2016 - 10:30 GMT
The pier at the Al-Ahmadi refinery in Kuwait. Kuwait's economy is shifting drastically as oil prices continue to drop. (AFP/Yasser Al-Zayyat)
The pier at the Al-Ahmadi refinery in Kuwait. Kuwait's economy is shifting drastically as oil prices continue to drop. (AFP/Yasser Al-Zayyat)

State Minister for Cabinet Affairs and acting Electricity and Water Minister Sheikh Mohammad Al-Abdullah Al-Sabah denied yesterday reports saying that the government could reduce salaries of Kuwaiti employees in its attempt to finance a huge budget deficit. The minister told reporters that he did not hear anything like that and it was only raised in the local press without any foundation.

But the minister said that the government presented to the National Assembly’s financial affairs committee a draft law for a new pay scale for civil servants with the hope it will be approved as part of the economic reform package. Sheikh Mohammad said the government provided the Assembly with its vision for rationalizing expenditures and agreed to meet again on Saturday to provide the Assembly committee with specific plans and data about economic reforms. The minister said the government rationalization policy will not affect infrastructure projects, especially in the electricity sector, because these projects are linked to ambitious housing projects.

A key meeting was held on Sunday between the government and the Assembly’s financial and economic affairs committee to discuss government plans for cutting subsidies and introducing economic reforms. The meeting was attended by the prime minister and speaker of the Assembly and a large number of lawmakers. The government wants to reduce subsidies provided to petrol, electricity and water without impacting low-income people. But lawmakers asked the government to implement spending cuts before taxing citizens.

In a related development, HH the Amir Sheikh Sabah Al-Ahmad Al-Sabah yesterday received the head of the Kuwait Chamber of Commerce Ali Al-Ghanem, who said they discussed the current economic situation in the wake of the sharp decline in oil prices. He said among the topics raised was how to find alternatives for oil revenues.

Separately, the court of appeals yesterday overturned a two-year jail sentence and a large fine against former minister of electricity and water Ahmad Al-Jassar and 15 current and former senior ministry officials, and acquitted them. The lower court had passed the sentence after convicting the officials of squandering public funds by approving a multi-million contract in 2007 that turned out to be bad for the ministry. After the lower court passed the verdict, Jassar submitted his resignation and later quit the Cabinet, barely a few months after taking up the post. At the time of approval of the contract, Jassar was a top official in the ministry.

Minister of Social Affairs and Labor Hind Al-Subaih meanwhile said yesterday that the ministry will shortly issue a number of decisions that would greatly limit the number of expatriate marginal workers. These decisions will be linked to the mechanism of recruiting foreign laborers from abroad and the duration of their stay in the country, the minister said.

Subaih said a decision will be issued to ban residency transfers from cooperatives, and transfers will be limited to other cooperatives just like the agriculture, fishing, shepherding and industry sectors. She said the plan to halt transfer from cooperatives came after statistics showed large numbers of workers have transferred from co-ops to the private sector, adding that 40 percent of corruption has been eradicated from the cooperatives sector.

“We will continue to organize the labor market and limit the influx of marginal labor and concentrate on trained technical labor,” Subaih said, warning inspection campaigns will continue in order to arrest violating workers in cooperation with the interior ministry. Subaih denied any injustice or inequity against expats who are deported from the country, saying deportation is for violating the labor law, and “despite this, we are keen on giving them all their rights”. She said the goal is to organize the labor market and punish violators, be they workers, employers or even colluding officials.

By B Izzak and A Saleh

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