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Kuwait … Where to?

WHAT is happening regarding the issue of easing the burden on citizens and restoring the confidence of small entrepreneurs is questionable.

It is impossible to look without suspicion when the banks stall in implementing the decision to delay loan installments for six months, let alone the conditions issued by the Kuwait Banking Association in this regard. This begs to wonder about the intention of these financial institutions.

Perhaps this is due to the ambiguity of the government’s decision to postpone loan installments, as it opened the door to various possibilities. Therefore, the banks did not hesitate to exploit the situation by immediately introducing a counter decision, as if it is inciting people against the state.

Bravo to the reaction of the government and the Central Bank of Kuwait, even though it came late, as it clarified the matter. However, the axe had already fallen on the head, as the banks had already subjected a significant proportion of debtors to determine those in favor of the postponement and those against it.

Actually, there is a major possibility that the postponement will be renewed due to the ongoing pandemic situation, the long curfew, and the absence of actual financial incentives, as this would lead to more borrowers defaulting when it becomes difficult to pay. Subsequently, this will add more pressure on a significant proportion of citizens.

Therefore, are the terms pitched by the Kuwait Banking Association and the Central Bank of Kuwait intended to push for bankruptcy? Does this benefit these institutions, or will it lead to losses, considering that their debts are guaranteed by the state, in addition to the large mortgages that exceed the debt in the first place? This in itself is an added aspect to the state’s guarantee.

Perhaps 90 percent of citizens are borrowers or have loans, due to the lack of realistic solutions to the crisis. The continued pressure on them raises suspicion. Therefore, in order to reassure citizens, a decisive confrontation has become a necessity that cannot be delayed.

If ambiguity in the decision, at the first glance, led to such great confusion and increased citizens’ frustration towards the state, then what would the reaction be if banks deliberately violated the government’s decision by circumventing it?

The most important question is — Why is the government not clear in dealing with the matter from its roots? Why doesn’t it follow the example of all other countries in the world that postponed loans, and ordered banks to reschedule debts and their interest in proportion to the needs of people, in addition to issuing realistic incentive laws that are not incapacitating?

These steps led to the revival of their economies, contrary to the case in Kuwait which barely emerges from one pit and ends up entering another deeper one.

It is likely that whatever is happening is either a clandestine move or the decisions are taken recklessly, or without proper deliberation, or even blindfoldedly by the weight of the influence of the banks.

For the past few months, decisions which were issued were devoid of merits to serve the economy or social stability in the country. They instead undermined the internal situation further. This prompts us to ask the question – Are there no wise heads in the government and the National Assembly to stop these ventures that are slaughtering Kuwait?

In this regard, for those concerned to review the fiscal stimulus law, which was issued last year, people were happy about this law because they assumed it was meant to rescue them from the crisis. However, when the commercial banks and the Central Bank went on to interpret it, it turned out that they made it incapacitating and suffocating for the citizens. In other words, the law was not intended to aid them.

And here we are, challenging the concerned parties to announce publicly how much the people benefitted from the aforementioned law.

By Ahmed Al-Jarallah

Editor-in-Chief, the Arab Times

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