For 44 years, the tragedy of the victims of the ‘Manakh Market’ crash has persisted without plausible solutions in sight. This enduring stock market crash, which has impacted the national economy and the social stability of many Kuwaiti families, remains unresolved even with the existence of the Difficult Debts Settlement Authority – a body in charge of addressing this decades-long problem.
The fact that 668 cases remain open up to this day strongly suggests that the solutions implemented, thus far, are not genuine attempts to resolve the crisis, but merely temporary, inadequate fixes. The human and financial cost of this inaction is substantial. Many of those originally burdened by these debts already passed away. Tragically, their children may now be suffering under the anguish of travel bans and other crippling hardships.
Financially, the legacy of these non-performing loans persists in the State budget, reflected in an item called ‘Debts under Collection,’ which currently amounts to a staggering KD7 billion – essentially uncollectible money. Furthermore, the legislative response to the crisis, particularly Law No. 41/1993, exacerbated the suffering. This law, issued by the National Assembly, imposed a punitive 15 percent penalty on the debtor for every missed payment, added directly to the outstanding balance. This law also established a body whose operational costs continue to drain the public treasury each year. The prolonged inability to resolve this issue is starkly contrasted by the swift and effective steps taken by other nations facing similar economic and financial challenges.
In the 1980s, Bahrain resolved what was known as the ‘Cheque Crisis’ with a single, decisive government action. Similarly, in Britain, Margaret Thatcher’s government tackled crises in the mining, unemployment and stock market sectors in 1985 through comprehensive economic restructuring.
While initially facing some repercussions, the financial sector of the United Kingdom rapidly recovered and triumphed over challenges with relative ease. The ongoing failure in Kuwait to resolve the ‘Manakh Market’ crash stands as a poignant reminder of the need for decisive action and a political will that prioritizes a permanent cure over temporary relief. Likewise, France suffered a major financial crisis in the 1980s and resolved it through pragmatic measures, without imposing any negative repercussions on its citizens or the local economy.
In Kuwait, however, there is a flawed approach to problem-solving: the saying, “Do not worry, time heals all wounds.” In reality, this only exacerbates the problem. If the ‘Manakh Market’ crash had been addressed promptly, perhaps, by liquidating the assets of those indebted, the situation would have been different. Those who died in despair would at least have been spared the daily suffering they endured. The good thing is that these debts were not inherited, otherwise, the children and grandchildren would have faced travel bans, asset seizures, and an inflated debt management apparatus. Furthermore, the value of the assets back then would have far exceeded the debt, and the State would have saved public funds.
Today, this crisis has become a dilemma, but it remains solvable if there is a genuine will to reduce the budget deficit that has plagued the country for three decades. Therefore, Your Highness, it is true that the future does not wait for the hesitant, for hesitation is the graveyard of opportunities. The solution to this historic crisis is within the grasp of the current Cabinet, which must enact a law addressing the repercussions of the ‘Manakh Market’ crash.
This will pave the way for resolving many financial problems for some individuals and will eliminate the biggest problem, or rather, the most significant interest on bad debts. It is unreasonable for the penalty to be 15 percent of the debt if the borrower defaults on any single payment. Finally, and most importantly, liquidate the assets of these individuals and abolish the punitive interest of 15 percent. The government will then find that it has recovered its debts, perhaps, even with a surplus.
