Kuwait cabinet to push through $5bn stimulus bill

RESCUE PACKAGE: Cabinet plans to by pass parliament, which has been dissolved, to push through the $5bn economic rescue package. (Getty Images)

The Kuwait Cabinet could push thorugh a $5.15bn stimulus bill as an emergency decree, bypassing parliament, in a bid to rescue the country’s ailing economy, the country's finance minister has revealed.

Mustafa Al Shamali told Alrai daily that the "economic situation as well as public opinion" were pushing for quick action over the stimulus package, according to Kuwait daily Kuwait Times.

He added that the package, along with the 2009-2010 budget and a capital market authority bill, will be on the Cabinet's agenda for this week’s meeting.

Earlier this week Kuwait’s Emir dissolved parliament and called for new elections within the next two months, abating fears that the country would be without a legislature for years.

It is thought the Emir may push through the stimulus bill under the country's 1962 constitution that gives him the right to legislate by decree on "necessary" matters when parliament is not in session or dissolved.
 
Meanwhile, in a further example of Kuwait’s poor financial shape the official news agency KUNA reported that 99 investment companies had lost a total of nearly $32bn between August last year and January.

The firms’ assets fell 31 percent to $72bn, down from $104bn at the end of July, according to official figures.

The drop reflected a 45 percent or $26bn decline in the companies’ holdings listed on the Kuwait Stock Exchange, as well as falls in local mutual funds and investments abroad.

A third of what those companies once owned was now "gone with the winds" of the global downturn, the report added.

The Central Bank unveiled its stimulus plan in February, but it was held up in a parliamentary committee as MPs wrangled over its compatibility with Islamic law.

Some lawmakers threatened to refuse to approve the bill unless the government bought or rescheduled billions in private debts owed by citizens.

The plan aims at helping struggling investment companies and offers bank loan guarantees.

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