The Empty Quarter

New parliament, new PM, new economic stimulus.

Kuwait dissolves parliament, set for $5 billion plan

Thu Mar 19, 2009

By Ulf Laessing and Rania El Gamal

KUWAIT (Reuters) - Kuwait’s ruler dissolved parliament on Wednesday, setting elections within two months to end a long-running political crisis in the Gulf Arab country.

The second dissolution of parliament in a year could allow the government to pass an economic $5 billion rescue plan by decree before the elections. But a row with the assembly might flare up again as Islamists are expected to dominate once more.

Lawmakers said Emir Sheikh Sabah al-Ahmad al-Sabah was expected to appoint his brother, Crown Prince Sheikh Nawaf al-Ahmad al-Sabah, as the new prime minister after the vote.

Kuwait’s ruler did not reveal his plans for the premiership after accepting the resignation of the cabinet led by his nephew Sheikh Nasser al-Mohammad al-Sabah, on Monday. Sheikh Nasser’s earlier cabinet resigned in November after a similar row.

The ruler, who has the last say in the OPEC country, did not say when the vote would be held but under the constitution it has to be within two months.

“Regrettable practices (in parliament) tarnished the freedom and democracy in Kuwait, and it was obvious that these practices ruined cooperation between the legislative and executive authorities and spread atmospheres of tension and chaos,” the emir said in a televised speech.

Islamist, tribal and liberal deputies have been criticizing ministers over the past three years, which have seen five cabinets come and go, many preferring to resign rather than face extensive questioning or a no-confidence vote.

The ruler said he would act again if necessary: “Everybody should know that based on my national responsibility, I will not hesitate to take any step to maintain the security and stability of the nation, protecting its interest and principles.”

Local media had speculated the emir would suspend the assembly for several years like predecessors did in the past.

UNDERLYING CONFLICT

The crisis reflects an underlying conflict between the pro-Western government and Islamist lawmakers who wanted to question the caretaker prime minister on his management of an economic crisis and alleged misuse of public funds.

The crisis has delayed economic reforms, including the stimulus plan to deal with the global economic crisis, which includes bank guarantees to help the battered financial sector.

The caretaker government could issue the stimulus package without parliament and some analysts say the next assembly would then approve it since implementation would have started.

“It will be difficult to stop it when it is already done,” said political analyst Shafiq Ghabra.

“The government should approve it by an emergency decree because it was the parliament who has delayed it all the time,” said former Oil Minister Ali al-Baghli.

Others say approval should not be taken for granted and that MPs could respond to being bypassed by approving by-laws that affect the way legislation is implemented.

Monica Malik, a regional economist at investment bank EFG-Hermes, said new elections and the appointment of the crown prince would improve the situation but difficulties would continue asparliament would be dominated by Islamists again.

“Consequently, we believe the government will last longer than it has over the last year, although there will still be difficulties in the relationship as the government will broadly remain reformist on the economic front,” she said.

Baghli said: “I don’t expect a big change in parliament.”

Ahead of Wednesday’s decision, Kuwaiti shares rose one percent on hopes the Islamist-dominated assembly might be dissolved and that the political crisis would be ended.

Kuwaiti members of parliament have a history of challenging the government. They have opposed many government plans to open up the economy and scale back a welfare state seen as an obstacle to expanding the private sector. The emir dissolved parliament in March 2008 to end a similar row but to no avail.