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IT is good of the Minister of Finance Abdul Wahab Al-Rasheed to declare that he will not bow to terror, and that he will stand firm and principled. It is better for him to work according to the interests of the country, and not to be subject to any parliamentary blackmail or government pressure.
However, when the S&P Global Ratings announced in its latest report that “the government is about to exhaust the liquidity of the General Reserve Fund and has not yet reached an agreement with the National Assembly on a comprehensive strategy for financing the budget deficit, which represents financing risks for the state, especially if the oil prices fall”, this is the challenge for the specialized minister to work on in order to reduce the public budget deficit, which the agency considered as “the highest in the world in the absence of a comprehensive financing strategy”.
This report is a wake-up call that must be heard well. The government should not bury its head in the sand, and argue that the parliament is obstructing its work. Kuwait does not really suffer from a deficit due to lack of income, but rather it suffers from waste due to the large number of laws approved by parliamentarians to buy votes.
Because of this, the financial deficit will remain on the rise as long as the subsidy system continues. Therefore, if the minister has the right to suggest that it be lifted from all goods and services, then he has the right to suggest insisting on passing the public debt law and imposing taxes. By the way, this is a constitutional matter. In return, he has to put appropriate plans to compensate low-income people, not just by raising their salaries, but also by setting a minimum wage.
On the other hand, there are a lot of waste gutters that successive governments have not noticed, including leasing the untapped industrial and white state lands, the value of which reaches more than KD 200 billion, according to some studies. They can be sold to investors in installments for over 10 or 20 years, and employ their sukuk by borrowing from local or foreign banks, with the guarantee of the state.
These lands are currently being used in the worst possible manner. Indeed, investors pay crumbs to the state, while they get millions from them. They can even be developed into investment attractions.
The Minister of Finance can also develop a practical strategy to solve the housing problem, which is aggravating day by day. On the other hand, other countries solved this problem years ago, including Morocco, Egypt, Saudi Arabia, the United Arab Emirates and Bahrain. They no longer face a problem in this matter, but rather saved many billions. In addition, they ensured that applicants of housing care obtain their right in the future through the flexible laws that were approved.
All this can be proposed by the Minister of Finance and worked on. If he finds any obstacles from the parliament, he can either propose to the government to file a letter of no-cooperation, and close it for a few years, or he can resign and announce to the people the reason for his resignation and the one responsible for impeding him from performing his duties.
The Minister of Finance is one of the well-known experts in financial affairs. Therefore, it is important that he should not take his presence in the ministry as temporary, but rather he must make every effort to get the country out of the financial impasse, and not leave Kuwait empty.
He should focus on the contents of the S&P Global Ratings report, as per which “the negative outlook of the rating reflects the risks over the next 12 to 24 months regarding the government’s ability to overcome institutional obstacles that prevent it from implementing a strategy to finance the budget deficit in the future”. He must then work on developing necessary solutions.
Will Abdul Wahab Al-Rasheed take up the challenge and succeed in the confrontation? Or will he lock himself inside his office and remain silent like his boss?
By Ahmed Al-Jarallah
Editor-in-Chief, the Arab Times