Finance minister warns Kuwait facing trouble paying salaries.

Finance Minister Barrak Al-Sheetan yesterday issued a stern warning in the National Assembly that the government’s finances are running out soon and it will be difficult to pay civil servants’ wages in November, as he tried to convince MPs to approve a debt law. Sheetan said the state reserve fund has just KD 2 billion in assets and the government needs KD 1.7 billion monthly, adding that a law suspending transfers of 10 percent of revenues to the future generations fund will help.

The government has submitted a debt law seeking to borrow KD 20 billion over the next 10 years to help meet a growing budget deficit due to the drop in the price of oil. MP Thamer Al-Suwait said Kuwait has assets worth KD 205 billion and the finance minister “shocked us by saying the government will not be able to pay salaries in November”.

MP Hamdan Al-Azemi said “it is shameful that we have the fourth largest sovereign wealth fund in the world and the government is seeking to borrow. This is evidence of the government’s failure.” Many MPs said they will vote against the law as long as the government cannot come up with a solid program of reforms to ensure that the loans are used for development. The minister however said global interest rates are very low and is better to borrow rather than withdraw from the sovereign wealth fund, because its returns are higher.

The Assembly overwhelmingly approved in the second and final reading a law on domestic violence that provides protection and shelter to victims of domestic violence and stipulates tougher penalties for assailants. The law stipulates the formation of a national committee for protection from domestic violence, comprising representatives from various ministries and government bodies. It also stipulates the establishment of a hotline for receiving complaints about domestic violence.

The Assembly also approved amendments to the labor law in the private sector to state that Kuwaitis working in the private sector are entitled to end-of-service indemnity on top of their pensions, with retroactive effect starting from 2010. The government said it rejects the law because it violates the constitution, and accordingly it is likely that the Cabinet will not approve it and will return it to the Assembly.

MPs accused the government of failing to encourage Kuwaitis to seek jobs in the private sector by rejecting the law. A number of lawmakers also utilized the opportunity to call on the government to accelerate plans to reduce the number of expats in the country to create more jobs for citizens.

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