Kuwait's Crown Prince addresses parliament. KUNA
Kuwait's Crown Prince addresses parliament. KUNA
Kuwait's Crown Prince addresses parliament. KUNA
Kuwait's Crown Prince addresses parliament. KUNA

No room for settling scores in new parliament, Kuwait Crown Prince says


Ismaeel Naar
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Kuwait’s National Assembly is poised to open its inaugural session of parliament where Crown Prince Sheikh Meshal Al Sabah called for unity after more than three years of political turmoil.

Kuwait has formed its fifth government in less than a year under Prime Minister Sheikh Ahmad Nawaf Al Sabah, naming new ministers for the defence and oil portfolios who took the oath of office before parliament convened on Tuesday.

“We went through a period of a lack of co-operation between the legislative and executive branches of government and now there is no room for wasting time, effort and opportunities in conflicts and the settling of scores,” Sheikh Meshal told parliament on Tuesday.

“We trust the National Assembly's keenness to achieve the aspirations of the people. We have a new phase of action, reform and advancing the national achievement process ahead of us. The National Assembly must be cleared of obstacles that hinder its work,” he added.

The last time Sheikh Meshal addressed parliament in 2022, he fought back tears as he recited verses from the Quran calling for unity, before receiving a standing ovation from attendees.

A general election last September delivered a mandate for change, bringing 27 new legislators to the 50-member assembly.

But in March, Kuwait’s Constitutional Court annulled the decree dissolving the previous parliament and reinstated it. A few weeks later, the ruling Al Sabah family dissolved that parliament again, setting up the most recent vote, in which most of the legislators elected in September regained their seats.

Kuwait's Crown Prince Sheikh Meshal Al Sabah with Prime Minister Sheikh Ahmad Nawaf Al Sabah. Photo: Crown Prince Diwan / Kuna
Kuwait's Crown Prince Sheikh Meshal Al Sabah with Prime Minister Sheikh Ahmad Nawaf Al Sabah. Photo: Crown Prince Diwan / Kuna

Kuwait is the only Gulf Arab state to have an elected parliament with powers to hold the government to account through measures such as votes of no confidence against cabinet ministers, including the appointed prime minister.

The political impasse between parliament and the government under Sheikh Ahmad over the past year has centred on a draft bill calling on the government to take over the consumer and personal loans of Kuwaiti citizens, with an estimated value of several billion Kuwaiti dinars.

The government said the move would be too expensive, costing almost $46 billion in public funds, while MPs said it would cost less than $6.5 billion.

“We look forward to democratic practices that will contribute to achieving a renaissance and activating the role of the National Assembly. The National Assembly must use constitutional means wisely and must complete the delayed legislation to achieve the aspirations of the people,” the Crown Prince said.

Kuwait's parliament in session.
Kuwait's parliament in session.

Parliament’s inaugural session on Tuesday also elected veteran MP Ahmed Al Saadoun as speaker, a pivotal political role that will shape its relationship with the current government.

Mr Al Saadoun had been speaker of the last parliament that was annulled by Kuwait’s highest court.

Sheikh Ahmad reflected on the recent months of disagreement and disunity between his government and the National Assembly.

“There is a hope that the two authorities will work together to achieve Kuwait's supreme interests,” he told the chamber on Tuesday.

“We are all aware of the seriousness of the current stage we are going through in the region and the world, which makes us face great responsibilities within an important national stage that requires decisions to protect the homeland and its stability.”

About three quarters of the declared winners of the September election were elected again on June 6, while 10 new candidates, most of them young, managed to beat incumbent MPs.

MP Jenan Boushehri was the only one of 13 female candidates to win a seat.

Just 207 candidates contested the election – the lowest number since 1996.

MP Marzouq Al Hubaini was chosen to address the opening session of the National Assembly as one of its eldest members. He also called for political stability.

“In this sensitive period in Kuwait's history, we aspire to transfer the state to a new stage of legal reference, in order to prevent abuse of power by either of the two authorities, and to distance the country from a state of disagreements just for the sake of disagreements,” Mr Al Hubaini said.

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: June 20, 2023, 10:21 AM