Kuwait's parliament reopens Saturday to tackle a series of essential economic bills, but the highest fiscal surplus in two decades is certain to cast serious doubts on the urgency of reforms, MPs and economists say.
"Economic reforms and imposition of fees were urgent in the past because of the critical situation of the treasury. But after the rise in oil prices and boasting a surplus, I don't think they will have priority," MP Adnand Abdel Samad told AFP.
"The increase in revenues may reduce the level of urgency and attention," added Samad, a veteran Islamist MP, long associated with parliament's finance and economic committee.
After years of huge deficits following the 1991 liberation from Iraqi occupation, the oil-rich emirate's last fiscal year, which ended June 30, posted a surplus of more than $3.9 billion. It is expecting an even higher surplus this year due to the soaring price of oil, which contributes more than 90 percent of public revenues.
Important draft bills on privatization, direct foreign investment, taxation, Islamic banking and opening the emirate's oilfields to foreign oil majors are high on the agenda of the house's eight-month term.
Although the 50-member parliament last term passed legislation opening the Kuwait Stock Exchange for foreigners, restructuring the ailing economy will remain a distant goal unless those bills are approved and implemented.
"I believe that the surplus will encourage political bidding by MPs to make election gains rather than restructuring the economy," economist Hajjaj Bokhdour said. "Parliament's activity will focus on grillings and political arguments between various political groupings. I have little hope that MPs will pay enough attention to the economy," he said.
A number of MPs have already threatened to grill three cabinet ministers, particularly housing minister Adel al-Sebeih for cutting housing welfare benefits to Kuwaiti citizens.
The government is also likely to face opposition from MPs over its controversial seven-billion-dollar plan to invite foreign oil majors to develop northern oilfields. MPs want to make sure the project does not involve ownership.
"Populist" MPs are also expected to oppose any cuts in state subsidies on basic services. Telephone, water and electricity charges in the tax-free emirate, which provides a cradle-to-grave welfare system for its citizens, are due to go up, according to an economic reform package.
"As a result of the surplus, economic reforms may take a back seat. But we must bear the (adverse) consequences. We will remain outside the world's modernization effort," bemoaned Amer al-Tameemi, head of the Kuwait Economic Society. — (AFP, Kuwait City)
© Agence France Presse 2000
By Omar Hasan
© 2000 Mena Report (www.menareport.com)