Two Cabinet ministers walked out of Kuwait's National Assembly chamber on Tuesday, causing consternation. AFP
Two Cabinet ministers walked out of Kuwait's National Assembly chamber on Tuesday, causing consternation. AFP
Two Cabinet ministers walked out of Kuwait's National Assembly chamber on Tuesday, causing consternation. AFP
Two Cabinet ministers walked out of Kuwait's National Assembly chamber on Tuesday, causing consternation. AFP

Kuwait MPs urge government to ‘follow constitution’ on tough economic proposals


Ismaeel Naar
  • English
  • Arabic

Several Kuwaiti MPs have issued a call for the government to “follow the constitutional path” in dealing with parliamentary proposals and decisions, after a withdrawal and boycott of this week’s National Assembly session.

The government boycotted Wednesday's parliament session, a day after two cabinet ministers walked out of the chamber, saying it was not allowed to express its opinions regarding draft economic bills.

MP Hamad Al Obaid said it was the government's first priority to attend Wednesday’s session and express its opinion on the matter, deliberate with parliament and vote on the motion.

Tensions rose surrounding one bill in particular, a draft calling on the government to take over outstanding consumer and personal loans of Kuwaiti citizens with an estimated value of several billion dinars.

Mr Al Obaid released a statement on Thursday, addressing Prime Minister, Sheikh Ahmed Nawaf Al Sabah.

“Your Highness, the Prime Minister, whoever referred to you the idea of withdrawing [from parliament] has implicated you, and whoever drafted this statement for you has also implicated you. The text of Article 50 of the regulations stipulates the government to attend the session.” Article 50 of Kuwait's constitution calls for co-operation between branches of government.

The Prime Minister convened an emergency cabinet meeting on Wednesday, in which ministers reviewed several decisions after the government's withdrawal from Tuesday’s session and its decision not to attend the following day.

The government said it had not been given a chance to study two reports prepared by the specialised financial committee before it could address the issued raised in front of parliament.

Preparations for Wednesday’s parliamentary session in Kuwait City, which the government refrained from attending. AFP
Preparations for Wednesday’s parliamentary session in Kuwait City, which the government refrained from attending. AFP

Mr Al Obaid said “it will be a good opportunity to form a rescue government with strong ministers” should the government decide to resign.

Another MP, Adel Al Damkhi, warned the government that its recent boycott was a reflection of past administrations and dissolved parliaments which have led to political deadlock, he said, delaying much-needed economic reforms.

“This is an approach that we have known only from governments that have failed and caused the country’s destruction in the previous period,” Mr Al Damkhi said. "We do not want this government to be on this same approach."

Jenan Bushehri, one of two women elected to the current parliament, said the questioning of Minister of State for Cabinet Affairs, Barak Al Shaitan, was long overdue.

“As long as the government acknowledges the course of the National Assembly session ... while ministers prefer to defend their interests and neglect the political and economic interests of the country and the citizens’ livelihood, it has become a constitutional entitlement to question the Minister of State for Cabinet Affairs,” she said in a statement.

The current crisis is reminiscent of past political disputes that led to the dissolution of the previous parliament and cabinet led by former prime minister Sheikh Sabah Khaled Al Sabah.

The previous government faced several months of political feuding and tension with the country's National Assembly over allegations of corruption.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: January 12, 2023, 1:51 PM