A mountain of obligations.

Position::Personal and corporate indebtedness in Kuwait
 
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Kuwait's problem of personal and corporate indebtedness has become the focus of a tussle for power between the government and the recently-elected National Assembly. The outcome will be crucial for decisions about a host of other issues, such as oil policy, privatisation and the management of overseas investments.

THE KUWAITI GOVERNMENT and the country's National Assembly are on a collision course over the issue of personal indebtedness which has cast a shadow over the local economy for more than a decade. The financial and economic decisions of whether and to what extent outstanding personal debts should be written off have been overtaken by political considerations as members of the assembly elected last year to flex their political muscles.

The assembly's Finance and Economics Committee wants to embarrass the government by forcing it to publish the names of the biggest debtors, many of whom hold prominent positions in Kuwait. The government understandably wants to find a way of avoiding this, without appearing to be acting to protect special interests.

The committee published its proposals on debt forgiveness in April and was revising them in May. Whatever the assembly decides has the force of law.

The committee has identified nine key topics which it wants to consider during the lifetime of the present assembly, which will run until 1997. Apart from the debt question, topics include oil policy, privatisation and the management of overseas investments. All are of crucial importance to the future of Kuwait, and in each case opposition politicians are seeking greater control and accountability where previously the government enjoyed almost unfettered freedom of manoeuvre.

The debt issue is top of the list and offers the first prospect of a showdown between the more radical members of the assembly and the government. The way in which the conflict is resolved will have an important influence on the outcome of future showdowns on the committee's other nine topics.

Abolition of the assembly is unthinkable at this early stage in its life, and so soon after Western democracies led the coalition which liberated Kuwait. However, a defeat for the government, involving publication of the names of major debtors is certainly conceivable. If that happens, the assembly would be all the more combative about other matters on the agenda.

A compromise - giving the committee some of what it wants but not so much as to alienate the government irretrievably -...

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