When the MPs got stuck on the Personal Debt Bill, the entire cabinet of the government resigned. The cabinet said that the condition of the government exchequer is already weak and this bill will empty it further.
Image Credit source: AP/PTI
Kuwait, one of the Gulf countries, is in discussion these days about a different type of bill and political upheaval. Recently, the same cabinet has given mass resignation. This cabinet did not last long. In August last year, Prime Minister Sheikh Ahmed Nawaf Al Ahmed Al Sabah assumed power and since then this was the third cabinet.
This third cabinet was formed in October 2022. In the midst of corruption and deteriorating economy, the Finance Ministry of this cabinet had warned the government that there was a need to curb wasteful expenditure. But despite this, some MPs presented a different type of bill. This bill is the reason behind the resignation of the cabinet. In this bill, it has been decided that the government will repay the personal loans of common people. The loan that is taken by the public to buy cars and household items.
What’s in this bill?
In this bill, it was said that the government will take the responsibility of consumer loans worth billions of dollars. The loan taken by the common people for their needs will be repaid by the government. According to the bill, the government had to bear the responsibility of paying the interest, while people had to be given more time to repay the loan amount. However, even the EMI of this amount was not to be given directly to the people. Actually, the Kuwait government gives an allowance like DA to the people, EMI was to be deducted from this allowance. That means the government has to pay the interest as well as the loan amount on its own.
Why was there a need for this bill?
About 4.6 million people live in Kuwait, out of which only 1.5 million are citizens of Kuwait. Kuwait’s economic policy is being said to be responsible for the need for a loan waiver bill to give relief to the common citizens. Oil reserves are also in Kuwait. But other Gulf countries, other than crude oil, focus on foreign investment to strengthen their economy, while Kuwait does not see any such effort.
Kuwait is 90 percent dependent on imports ranging from food items to necessities. The inflation rate is high in Kuwait, while the unemployment rate also remains high. MPs say that this bill was needed to give relief to the citizens in such a situation.
MP Shoaib Al Muwaijri, head of the Parliament’s Financial and Economic Affairs Committee, says that MPs will not back down from the personal loan waiver bill. He says that if the government does not approve this bill, then an alternative will have to be given, so that there is an increase in the salary, pension and social security of the common citizens.
different political system
Kuwait’s political system is different from other Gulf countries. There are regular elections for MPs, but not as a party, rather people contest elections independently. Although the prime minister is appointed by the head of the royal family of Kuwait. At the same time, the Parliament also has many rights. For this reason, when the MPs stuck to the Personal Debt Bill, the entire cabinet of the government had to resign. The ministers of the cabinet said that the condition of the government exchequer is already weak and this bill will empty it further. When the tussle between support and opposition increased, the entire cabinet resigned.
How much burden will increase on the government?
The question is how much burden this consumer loan bill can put on the exchequer? According to the MPs supporting the bill, this amount is close to $ 6.5 billion. But its assessment is also reflected in the estimate of the Central Bank. According to this, loans of 5 lakh citizens come under the ambit of this loan and the total loan amount is 14 billion dirhams i.e. about 46 lakh dollars. According to the report, this could be 60 percent of Kuwait’s total budget in the current financial year.