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Sunday , November 29 2020

Questions raised on borrowing

KUWAIT CITY, Jan 16: MP Riyadh Al-Adsani has affirmed that the economy is solid and there is no budget deficit. He said the parliamentary Budgets and Final Accounts Committee will meet the representatives of the interior and finance ministries on Wednesday to discuss the hospitality clause in the Interior Ministry and request for referral of the issue to the Public Prosecution.

On the grilling of State Minister for National Assembly Affairs Adel Al-Kharafi, Al-Adsani claimed the appointment of Al-Kharafias minister is suspicious; adding that he will grill Defense Minister Sheikh Nasser Sabah Al-Ahmad if he endorses the proposal of Al- Kharafiand HH the Prime Minister Sheikh Jaber Al-Mubarak if he confirms validity of the procedure.

Meanwhile, MP Adel Al- Damkhi has forwarded questions to Finance Minister Nayef Al-Hajraf about State loan, particularly the draft law allowing the government to borrow as much as KD 25 billion from local and international markets. He wants to know if the government studied the pros and cons of withdrawing money from the general reserve of the State or borrowing from local and international markets to cover the expected deficit in the coming financial years.

If yes, he demanded for a copy of the study. He also asked about the justifications for increasing the loan amount to KD 25 billion, allowing the government to hold such loans for 20 years, and payment period of 30 years. He inquired if the Central Bank of Kuwait’s opinion has been taken into consideration in the draft law.

If yes, he requested for a copy of the opinion. He demanded for more details like government deposits in the local banking system, as well as amounts withdrawn by the Central Bank of Kuwait from the banking system either through bonds, current accounts and deposits of local banks.

Furthermore, Fatwa and Legislation Department member Sheikh Ajeel Al-Nashmi argued the government is not allowed to borrow KD 25 billion due to the high interest rate which is prohibited according to the Islamic Sharia Law. He pointed out it is unacceptable to use the deficit or public expenditures as justifications for obtaining such a loan. He stressed the country has not reached the stage that necessitates obtaining loans with high interest.

 

By Abubakar A. Ibrahim Arab Times Staff


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