Budget deficit at 64%
Panel reviews Silk City law
KUWAIT: The National Assembly yesterday held a rare meeting with the Supreme Planning Council to review government plans to reform the economy in the face of falling prices of oil, which contributes to more than 95 percent of public revenues. The meeting discussed measures the government proposes to take to finance the budget deficit projected at a record KD 11.5 billion, mainly by lifting subsidies on electricity, water and petrol.
Kuwait remains the only country in the Gulf Cooperation Council (GCC) not to raise the price of petrol as all other five members - Bahrain, Oman, Qatar, Saudi Arabia and United Arab Emirates - have taken such measures. The meeting was attended by members of the economic development committee of the planning council, the assembly speaker and 26 MPs, in addition to a number of Cabinet ministers.
Minister of Public Works and State Minister for Cabinet Affairs Ali Al-Omair said after the meeting that the issue of subsidies occupied a small part of the meeting, which focused mainly on the wider scope of economic reforms and measures to cut government spending. The minister said that all sides are in agreement for the need to reform the Kuwaiti economy and tackle imbalances in it, represented in its total dependence on oil as the main source of income.
Omair said the government will brief MPs today of its detailed plans to raise the prices of electricity, water and petrol, ahead of a crucial Assembly session tomorrow. During this meeting, the finance minister is due to explain to lawmakers the exact measures the government plans to take to meet the budget deficit and any legislation needed for the purpose. Head of the planning council economic committee Nasser Al-Roudhan said the projected deficit is 64 percent of the budget, and accordingly measures have to be taken in this direction to finance the budget.
MP Yousef Al-Zalzalah meanwhile told Al-Anbaa newspaper yesterday that the government has proposed to raise electricity charges from 2 fils per kilowatt currently to 5 fils/KW for the first 3,000 KW, 10 fils for between 3,000 and 6,000 KW and 15 fils for consumption above 6,000 KW. He also reiterated that the government wants to raise petrol prices to 85 fils a litre for low-grade 90 octane fuel, and 105 fils a litre for 95 octane petrol.
MP Saleh Ashour said after the meeting that it focused on two points: That the budget depends heavily on oil as the main source of income and that the government's civil servants are incapable of running the country. He said most of government staff was appointed through favoritism and other unprofessional practices, and accordingly it cannot even run a supermarket and has failed to find any solution for any problem. MP Askar Al-Enezi however said that MPs are ready to relinquish their benefits and cars to cut spending, but reducing subsidies should be the last resort.
Meanwhile, the Assembly's public utilities committee yesterday began reviewing a draft law to set up a special authority to run the Silk City mega project which envisages building a new city in Subbiya along with many development projects. Rapporteur of the committee MP Saud Al-Huraiji said the discussion of the law will take several meetings because it includes many provisions that need to be reviewed carefully. He said that the law grants the head of the authority more powers than the prime minister himself, adding that the bill will not be debated by the Assembly in tomorrow's session.
© Kuwait Times 2016
