Kuwait committee opposes 10% rise in spending plan

Parliament's budget committee rejects gov't-proposed 10% increase in spending for 2011-12
Kuwait committee opposes 10% rise in spending plan
A general view of Kuwait. (Getty Images)
By Reuters
Mon 27 Jun 2011 07:25 PM

The Kuwaiti parliament's budget committee has opposed a government-proposed 10 percent increase to the OPEC member's spending, a lawmaker said on Monday.

In January, Finance Minister Mustapha al-Shamali said expenditure in the 2011/12 fiscal year was expected to come in at KD17.9 billion ($65.16 billion), a 10 percent increase from the 2010/11 budget.

The government proposed amendments which would increase budget spending by 1.8 billion dinars mainly for wage and benefits increases for Kuwaiti citizens, according to a letter sent by Shamali to the committee, and seen by Reuters.

"All seven members of the budget committee unanimously rejected the state's budget (amendment) due to excessive ... spending," committee head Adnan Abdul Samad told reporters.

Concerned about regional unrest, Gulf oil exporters have boosted government spending to ease social tensions at home with Saudi Arabia pledging handouts worth $130 billion, or around 30 percent of its GDP.

Kuwait has seen limited protests and frequent challenges to the government by its parliament, the most outspoken in the Gulf Arab region.

Already in January, Kuwait announced plans to spend nearly $5 billion, or more than 4 percent of its GDP, on cash grants and free food rations.

Inflation in Kuwait is the highest in the Gulf at 5.4 percent year-on-year in May, data showed on Sunday.

The 50-member parliament is scheduled to vote on the budget on Wednesday, which had been approved by the Gulf Arab state's government in January. It was not immediately clear whether the assembly might vote to accept the government-proposed increase.

The budget is based on a crude oil price of $60 per barrel.

Kuwait, the world's fourth-largest oil exporter, posted a surplus of 6.5 billion dinars in its 2010/11 fiscal year as oil income jumped. The net figure is after a transfer of 10 percent of revenues to a fund for future generations, managed by the OPEC producer's sovereign wealth fund.

For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.