Lagging parliaments, slumbering government, people ask: how did white dime fly past you?

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THE government delayed in rescuing the economy and the financial situation of this country; however, despite its delay, it is better late than never.

Nevertheless, the solutions it came up with will not fix what was broken in the past months despite the recent decision issued to appoint a team led by Sheikh Dr Mishael Jaber Al-Ahmad to diagnose the effects of the COVID-19 crisis on the economy and the decline of global oil prices, and to prepare a practical comprehensive program for remedying the situation. However, all this will not bring an end to the losses.

Undoubtedly, the choice of this team’s head is perfect, as Sheikh Dr Mishael had majored in economics and specialized in this field. When he supervised the Kuwait Investment Authority, the governments used to overlook his recommendations; hence, we hope the government will this time implement the recommendations in order to avoid going around an empty circle.

Sheikh Dr Mishael Jaber Al-Ahmad is among those who have been saying over and over again that the legal infrastructure of this country repels investors, given that, any foreign investor would not risk investing in this country if he does not feel protected.

Therefore, it was necessary to improve the legal infrastructure; for instance, the bankruptcy law and facilitation procedures. However, all these ideas fell on deaf ears, as the investment bills remained on the shelves after the Parliament lagged in passing them, and the government slumbered on the abundance of revenues without saving for the rainy days.

The absence of clear economic management vision became apparent during the COVID-19 pandemic, as other countries managed to secure soft loans for their private sector to cushion it from collapsing, even in poor countries. On the other hand, our government set up a plan to devastate the sector instead of setting incentives.

It lifted its hands off the local banks which were supposed to provide guarantees amid lack of other guarantees. It seemed as though the government wanted to take away the sandals of a barefooted person, and the situation reached the extent of the governor of the Central Bank of Kuwait tendering his resignation from the responsibility of the committee in charge of remedying the economic situation – a move that reflects heavily on the severity of the situation.

Indeed, the Central Bank did well when it ordered the local banks to delay the payment of loans for six months, which perhaps will need to be extended to nine months. Despite that, the banks sooner or later will start collecting from their borrowers without wondering how these borrowers will be able to fulfill their loan obligations when their businesses were put on hold due to the precautionary health measures and their losses were not cushioned by the government, let alone their ability to return to normal life?

In other countries especially the neighboring countries such as the Kingdom of Saudi Arabia, the United Arab Emirates among others, precautionary measures were taken in parallel to economic rescue measures, and the governments guaranteed the salaries of the employees in order to avoid the private sector from collapsing.

In the absence of a sound economic solution that emerged in the process of funding the procedures taken to combat the COVID-19 crisis, the government endorsed KD 400 million, which ended up being limited to the construction of field hospitals.

Just after a few days, violations started to emerge, and the matter was referred to the Public Prosecution and the Civil Service Commission. In short, what transpired in the past eight months was a complete joke.

The government was in a position of positively investing in this crisis, given that the global share rates had declined, creating a tremendous opportunity for investors. While Saudi Arabia and the UAE strived to enhance their financial reserves, Kuwait dilly dallied either by saying the Parliament did not approve the public debt law or by buying some shares in the local banks which would have been met with claims that the government is supporting the traders.

This continued to be the norm until the worst possible news was revealed, which is that the government, despite the wealth of this country, might not be able to pay the salaries of its employees starting from November. What is worse than this is that this news was mentioned by the Minister of Finance while addressing the Parliament.

Currently, some government institutions have reported their inability to pay the salaries of the month of August to their employees.

If the government would have approached this issue pragmatically, it would have earned billions by utilizing the effects of the COVID-19 crisis. Unfortunately, it did not take any financial procedures to block the negative effects of this crisis due to its fear of the Parliament or due to some flimsy considerations. Now the government is entering a period where it will have to borrow at a high interest rate due to misreading of the situation.

Your Highness the Prime Minister, we all know that there are no financial and economic experts in the Parliament; and this is not a shame. Rather, it is shameful that the government relies on the Parliament instead of dispatching an army of experts and advisors to them so that they would realize the actual financial situation.

Why should the government borrow KD 20 billion? Why didn’t it invest some money in the global market in a manner that would have saved itself a lot. To indicate this, we have two examples – first is Lebanon, which borrowed at an interest of about 16 percent, and the second is Saudi Arabia, which has sovereign reserves and therefore borrows at an interest rate of 1.5 percent.

Letting things reach this far is due to the lack of a wise treatment for the economic situation, which should have come from the Amiri decree after the Cabinet refers to him.

Similar is the case in the UAE, Saudi Arabia, France, Britain, Canada and other countries that did not wait for their parliaments and went ahead in doing the right thing in terms of pumping billions into markets in a bid to cushion their economy.

Your Highness the Prime Minister, I present these facts before you as a citizen who has no interest other than Kuwait’s interest.

People of this country today do not hold the National Assembly alone responsible. Rather, they believe the government fell short in protecting their livelihood despite their conviction that health comes before wealth; however, money also buys the tools and equipment that protects health.

It would have been better not to be drawn to this unjustified fear, while exaggerated precautionary measures have become a door to starvation and self-interest, which leads to loss of health and money.

By Ahmed Al-Jarallah

Editor-in-Chief, the Arab Times

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