Opposition mounts to Kuwait's $5bn stimulus package

MPs opposing the Kuwait government’s $5bn stimulus package have condemned the draft bill as a total breach of the country’s constitution, it was reported on Tuesday.

The Popular Action Block has called for amendments to the draft bill, which aims to bailout companies and banks that are struggling in the midst of the global economic crisis.

The Block wants to make it mandatory under the stimulus package for each company applying for funds to undergo a thorough investigation of their financial accounts, by two independent assessors before any money can be handed over.

It also sets out proposals to cap the salaries of executives working at the bailed out companies and banks, and to put a ban on bonuses and incentives during the loan period.

Every organisation that gains a loan must also pay five percent of their net annual profits to the state reserve, the Block added.

In an even more stringent plea MP Ahmad Al Mulaifi submitted amendments of his own that essentially called for stricter rules when evaluating the assets of companies to be covered by the bailout plan.

Such moves would prevent the squandering of billions of dinars of public funds, the Block and Al Mulaifi said, according to Kuwait daily Kuwait Times.

"The government package aims at rescuing blue-blooded people who are nothing but whales who live at the expense of public funds," added MP Mohammad Al-Obaid.

He went on to call on MPs to reject the government package and urged action to help around 200,000 Kuwaitis who are suffering because of huge bank loans.

However, other MPs said the new amendments would "completely kill" the original bill and that failing to pass the rescue package would see the state’s economic problems move to a disaster.

Head of the National Assembly's financial and economic affairs committee MP Abdulwahed Al Awadhi said the committee will review the Popular Bloc's amendments on Tuesday morning and those of Al Mulaifi in the afternoon.

The Block submitted 13 articles that amend nine articles in the government's 31-article bill, and suggested four new articles.

The whole idea of the amendments is based on a constitutional requirement that any loan or guarantee to be provided by the state must be submitted in a separate law to the National Assembly.

The amendments require the government to submit separate bills for any loan or guarantee to individual companies or banks, and the bill must specify the amounts needed for the rescue, in addition to a detailed account of the company's financial position.

The Bloc's amendments aim at restricting any authorisation the government bill provides to the Central Bank governor in implementing the bill in a bid to guarantee that public funds are not squandered.