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IN any country, financial deficit seeps into the economy due to postponements. This invites more complication, and also triggers paralysis in the state institutions. Furthermore, the state – any state – gradually loses the ability to recover and advance because its leaders and officials convince themselves that nothing can be done overnight, and thus solutions continue to delay.
There is no doubt that any decision has a fateful importance, as it is not possible to, for example, postpone the decision to confront an internal or external aggression due to the fact that delaying to react in such a matter is tantamount to surrendering.
Therefore, countries that sought pride, progress, advancement and strengthening of their capabilities never rely on the concept of “time will come to deal with a matter”. They instead apply the adage – “a stitch in time saves nine”.
An example that can be used to indicate the escalation of problems in Kuwait is the housing welfare issue. The delay in radically tackling the issue has turned the matter into a dilemma that consumes a lot of time and money.
The damage caused by the delay in dealing with the housing crisis continues to increase, despite knowing that there are many solutions to it. All that is required is decisions that do not require waiting for the approval of the National Assembly, which introduces demons of parliamentary interests in everything.
In 1972, the National Assembly unanimously approved fundamental amendments to the law of the Savings and Credit Bank, which is currently known as the Kuwait Credit Bank, in order to ease the burdens placed on the citizens who are seeking housing care.
In a bid to avoid obstacles, the parliament approved mortgage facilities, which helped citizens to obtain soft loans from commercial banks, with the state guaranteeing the interests of those loans. However, the law was later amended, and those facilities were suspended without any convincing reasons.
Since that time, those seeking residential care have been entering the cycle of waiting and disruption, which led to a crazy increase in real estate prices, and the inability of citizens to obtain housing care.
Given that the argument in this regard includes the lack of land for residential care, there is also a need for the Kuwait Credit Bank to ensure funds are controlled by the government. We saw how the amount of KD 800 million became a subject of bargaining and dealings between the legislative and executive authorities, while on the ground, this amount is not enough to finance 11,500 housing units. In fact, the country needs more than seven billion dinars to provide housing for citizens who have been waiting for about 15 years and more.
In many countries, this dilemma was resolved by a decision taken overnight, as is the case in the United States, Britain, a number of Scandinavian countries, Jordan and Saudi Arabia, through housing banks in which commercial banks participate. The state guarantees the interests of loans provided to citizens, which reduces the burden on public finances.
This matter is easy to solve if there is a real desire to get out of this tunnel, which increases the darkness of the inaction of governments and the parliaments. We therefore put the matter before His Highness the Crown Prince, as long as the government has resigned and the legislative authority is consequently suspended.
It is considerably easy to issue a decree of necessity to force this matter to return to its proper course, by approving the mortgage law, and amending the law on the Kuwait Credit Bank to allow the participation and contribution of commercial banks to the financing of housing loans.
Your Highness the Crown Prince, the Kuwait Credit Bank has more than three billion dinars in loans provided to citizens, which it can sell to banks. The state becomes the guarantor, which leads to an acceleration of the financial cycle.
In addition, banks have about KD 70 billion in reserves and deposits, and they invest only a small fraction of it in the markets, whether locally or globally. Therefore, it can also free up part of that amount and provide it as loans to citizens with the guarantee of mortgaged properties. In this way, the housing problem can be solved, and the state does not incur any cost other than the interest, the percentage of which can be agreed upon.
This matter can be done overnight. It does not require a lot of discussions and bickering between the government and the National Assembly, but rather a decision that can save a lot for the country, and can ensure psychological stability for the citizens. Such a decision would enhance the role of the state in social protection, and activate the economic cycle, which suffers from stabbing on the back on a daily basis through wrong instructions, and ignoring the advice of economists who seek to advance the national economy.
Your Highness the Crown Prince, it is up to you if your Highness desires more explanation and clarification of this matter. The decrees needed to solve the problem are in your hands.
By Ahmed Al-Jarallah
Editor-in-Chief, the Arab Times