KUWAIT, Feb 8 (KUNA) -- The current Government boasts longest record of economic reforms, due to cooperation with the National Assembly, the Minister of Finance has announced, stressing anew necessity of rationalizing subsidies and slashing expenditures.
Anas Al-Saleh, the Deputy Premier, the Acting Minister of Oil, was speaking following a meeting, held on Monday, within framework of the National Assembly Bureau. The session, presided by Speaker Marzouq Ali Al-Ghanim and attended by ranking officials, aimed at addressing a host of issues concerning the current economic conditions, in shadow of drastic fall of oil prices.
Minister Al-Saleh said the special panel tasked with examining the subsidies delivered to the MPs, during the meeting, a report by the consultant charged with studying the issue, addressing forecast impact (of altering the subsidies) on living conditions of families, individuals as well as the whole society of Kuwait.
Main objective of rationing the subsidies is altering consumption patterns, the minister said, adding that the Government, "in cooperation" with the National Assembly, has a housing plan that would warrant building mega power stations, "for sake of absorbing the population growth." "We cannot carry on with such (hefty) consumption; we need an infrastructure, utility and power potentials to cope with the population growth," Minister Al-Saleh emphasized anew.
Explaining further the Government approach to cope with the major economic problems, Minister Al-Saleh said, "Lifting the subsidies is not economic reforms; it is part of a well-calculated reform scheme and one of the avenues that include economic development, privatization and activating role of the partnership authority" -- alluding bonding with the private sector as well as individual investors from among the nationals.
He also noted that during his address to the fellow participants in the meeting that he presented the reform plans attached with specific timetables and schedules.
Among the planned projects, aspired to be executed, once the partnership law has been endorsed, are five ventures projected to be executed this year -- they will be promoted in the coming three months. They include Al-Khairan power station, the second Al-Zor reactor, Kabad solid waste plant, Umm Al-Haiman plant for liquid waste, Al-Abadali solar power station -- value of which amounts to KD three billion, 50 percent stakes of which to be for the citizens, with forecast 10 percent proceeds. (USD=KD 0.3) Minister Al-Saleh, during the session debate that touched on MPs' calls for rationing Government expenditures, noted that the Amiri Diwan had taken an unprecedented step, at the regional level, by trimming its budget. This overture on part of His Highness the Amir constituted a clear message to State departments. "Today we are in a dire situation where the Budget income has dropped and the deficit soared to some KD 12 billion," he announced.
The Minister stressed on necessity of taking gradual measures to tackle the deficit, in a manner where "we should not consume our reserves to spare ourselves dire consequences.
"Some wonder about destiny of the (financial) surpluses posted over the past 15 years, where they have gone? They have been shifted to the State general reserves fund with deductions for the next generation fund, in addition to spending to cover the deficit last year," he said, adding that "we are preparing to fund the deficit next year with the available means." Nevertheless, he cautioned that the State should not continue covering the deficit from the reserves, also noting need, as part of the prescribed remedies, to protect the middle class, as well as diversify the income resources.
Asked on the Government stance with respect of the agreement worked out between the Supreme Planning Council and the MPs, reached during Sunday's meeting, that "there is no need for rationalizing housing subsidies," and MPs' concerns that necessities' prices may skyrocket if the subsidies are "lifted," the minister affirmed that the Minister of Commerce is seeking "to deter any bid to lift the prices without grounds." He labelled as "unacceptable" bids to hold the current Government and the National Assembly responsible for lack of economic reforms. "This Government has taken much more measures than previous ones and that is due to existence of a cooperating legislative authority, contrary to the previous years, where disagreements impeded such cooperation," he said.
In the oil sector alone, some KD 30 million have been earmarked, with projected ventures estimated at KD 15 billion, he elaborated, restressing that "there must be explicit integrated and structural reforms for tackling the economic shortcomings." On future plans for enhancing non-oil returns, the minister affirmed that this is one axis of the reform strategy, and that this applicable partly through establishing partnership companies where the citizens can subscribe, in addition to boosting privatization and small enterprise.
Asked on the "zero hour" for declaring decisions regarding the subsidies, he -re-affirmed that, "Not a single resolution will be issued in this respect without consensus with the National Assembly.
"The Government measures will be well calculated; not slow, and this issue is no longer optional. (pickup previous) rkf.rk