FACTBOX-Economic reforms at stake for Kuwait's new assembly

Sun May 17, 2009 2:53pm IST

Stocks

   

May 17, (Reuters) - Women won four seats in Kuwait's 50-seat assembly, a first for the Gulf Arab state, in an election that also saw liberals and Shi'ites claw seats away from Sunni Islamists who have long played a dominant role.

The world's fourth-largest oil exporter wants to diversify and revitalise its economy but several reforms have been held up the standoff between parliament and the government.

Analysts say losses for the Islamists, who have helped lead parliamentary opposition to the government's economic reform efforts and tend to form alliances with conservative tribal figures, may not be enough to end the long-running tussle.

The elected parliament has the power approve laws and Kuwait's budget. It can also cancel major deals and projects.

Following is the status of key reform plans:

GOVERNMENT-APPROVED

-- The last cabinet resigned in March, paving the way for the ruler to approve a 1.5 billion dinars ($5 billion) economic stimulus package through emergency legislation. The plan, which faced some opposition in the last parliament, still needs to be approved by the new assembly. Analysts say it is more likely to be passed by the new parliament when it convenes for the first time in June because implementation will already be underway.

-- In December, the government launched an investment fund worth at least 1.5 billion dinars to shore up the bourse after it was hit by the global financial crisis.

-- Last year, the central bank saved Gulf Bank (GBKK.KW), the fifth-largest local lender by market value, and ordered the bank to restructured. The Kuwait Investment Authority, the country's sovereign wealth fund, bought a 16 percent stake in Gulf Bank when it made an emergency rights issue.

PASSED BY PARLIAMENT

-- Parliament passed a law in October to guarantee bank deposits after the central bank stepped in to save Gulf Bank following derivatives losses worth $1.4 billion.

-- Parliament approved in January 2008 the sale of loss-making national carrier Kuwait Airways [KA.UL] within two years.

-- Deputies approved in 2007 a government-sponsored bill to cut tax on foreign firms to a flat 15 percent from up to 55 percent. Gains on the stock market will be tax-free for foreign investors.

-- Parliament also approved a bill to outsource more activities such as warehousing facilities.

PENDING APPROVAL

-- Kuwait cancelled a tender to build the 615,000 barrels-per-day Al-Zour refinery, the country's fourth, after deputies mounted opposition, citing alleged tender violations. Kuwait said it had not cancelled the project, but did not say when will issue a new tender. The new cabinet and parliament are to decide on the fate of the $15 billion refinery.

-- Parliament has yet to pass a law establishing a financial markets regulator to supervise and bring more transparency to the Arab world's second-largest bourse.

-- Project Kuwait, a plan to pump more oil from northern fields to help boost output capacity, has never made it beyond committee level because of opposition from some MPs to the involvement of foreign companies in the vital energy sector. Kuwait's fields are off-limits to foreign investors. The multi-billion-dollar project has been on hold for over a decade.

-- The government wants to speed up the sale of state firms and increase the private sector's role in investments. Kuwait also wants to privatise the oil sector to revitalise the country's largest source of revenue. But parliament has yet to approve a privatisation bill which has been in the works for more than a decade.

-- The government has also said it wants to allow foreigners to own property as they are allowed to do in some other Gulf countries but no details have emerged yet.

-- Kuwait is seeking to create a regulator for the telecommunications sector but no bill has been passed by parliament so far. (Reporting by Rania El Gamal; Editing by Louise Ireland and Lin Noueihed)

  • Most Popular
  • Most Shared

DEFENCE

REUTERS SHOWCASE

Power Theft

Power Theft

India to invest $4 billion to tackle power theft  Full Article 

Debt Funds

Debt Funds

India monitors foreign flows into debt funds, may tighten rules  Full Article 

Bulgari Back in India

Bulgari Back in India

CEO: we shouldn’t have left India so we’re back  Full Article 

 Hindu "Modi-fication"

Hindu "Modi-fication"

Fears grow about Hindu "Modi-fication" of education  Full Article 

Weak Credit

Weak Credit

Hard to hit tax revenue target, credit weak - Jaitley  Full Article 

China Rate Cut

China Rate Cut

China surprises with interest rate cut to spur growth  Full Article 

Gold Imports

Gold Imports

RBI cautious on response to gold import surge  Full Article 

Economic Corridor

Economic Corridor

China commits $45.6 billion for economic corridor with Pakistan  Full Article 

Overseas Funds

Overseas Funds

RBI says overseas borrowed funds can be parked with banks in India  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage