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Saturday , January 16 2021

Between ‘Hanna’ of Central Bank, ‘Mana’ of banks … we lost our beard

HAS the government really approved a stimulus plan, or is it a failure?

This question should be answered by the government, as well as the Central Bank, which, according to officials from commercial banks, has issued an order for them to collect interest on loans for the past six months when the collection had stopped due to the outbreak of a global pandemic. In reality, they must be carried over to the end of the loan, or rescheduled, rather the exemption must be made among them, because they are subject to force majeure and lead to disastrous consequences for citizens, particularly the borrowers.

It is true that the government approved a stimulus plan, but it is imaginary, complex and weak. Its results were negative for the national economy, as it led to the bankruptcy of many small and medium-sized enterprises owners. It raised the debt ratio to a very high level, and all of this led to a high rate of lawsuits. It seems as if the goal of the government and the Central Bank is to impoverish people, not help them.

All other countries adopted very bold stimulus plans that revitalized their economies. Even those that live on taxes have not resorted to the measures adopted by Kuwait, which is supposed to have great financial solvency. Their governments base all their programs on the slogan of “encouraging the private sector” and “protecting citizens in times of major crises. However, with this confusion it seems that it is trying to make them prey to the commercial banks.

While the COVID-19 pandemic is still spreading and no vaccine or serious measures have been found to stop the spread of this pandemic, the image of the country currently looks very bleak. It is as if only this country in the world is suffering from this pandemic. While most countries have opened their borders, improvisational decisions are still closing half of this country, and our borders remain closed. The Kuwaiti genius has imposed stay for those coming to the country in a third country where hotels and markets are being revived while our hotels are kept empty.

The projects have almost stalled or the percentage of work in them does not exceed 50 percent. The government withholds the money of contractors and those dealing with it without paying any penny for them. Where will people get the money to pay their dues and loans?

Realistically, the six-month period of non-payment of loan installments and postponing the payment of interest is not sufficient. It is the weakest measure taken to stimulate the economy, as it has increased burdens on the private sector. And with the arbitrary and vague orders issued by the Central Bank, it appears that the state is seeking to imprison the majority of Kuwaiti borrowers, and allowing the banks to seize their property. For this, an explanation must be given for what commercial bank officials say. Kuwaitis are now between the “Hanna” of the Central Bank and “Mana” of the banks through which we lost our beard.

By Ahmed Al-Jarallah

Editor-in-Chief, the Arab Times

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