Kuwait Cabinet Quits In Step Toward Ending Political Impasse

(Bloomberg) --

Kuwait’s government resigned on Monday after less than a year in office, a move aimed at breaking a political deadlock that has blocked fiscal reforms.

The resignation, received by Emir Sheikh Nawaf Al-Ahmed Al-Sabah, had been expected after several rounds of talks between feuding government officials and opposition lawmakers. 

Led by Prime Minister Sheikh Sabah Al-Khaled Al-Sabah, it’s the third government to resign in a year. Finance Minister Khalifa Hamada, who stepped down in August, is widely expected to be replaced. Appointed last January, Hamada became the fifth person to hold the post in just under seven years.

The Gulf nation, home to about 6% of the world’s oil reserves and the fifth-largest producer in the Organization of Petroleum Exporting Countries, posted a record budget deficit in the last fiscal year amid a cash crisis exacerbated by a plunge in oil prices and the coronavirus pandemic.

Years of political tensions have stymied efforts to diversify the country’s oil-reliant economy and promote foreign investment. Parliamentary sessions have been largely disrupted since opposition lawmakers gained ground in the December parliamentary elections. The legislators, who have pushed for political reforms including an amnesty for government critics, had submitted multiple requests to question the premier. Today’s resignation means the prime minister avoids that scrutiny.

The cabinet had approved earlier in the day draft decrees to pardon a number of Kuwaitis as part of a national dialog called by the Emir. The amnesty is set to include former opposition lawmakers and activists exiled in Turkey, who led protesters to storm the parliament building in 2011.

The reprieve is seen helping pave the way for the passage of much-delayed legislation, including a law that would allow the government to borrow on international markets and another allowing it to dip into Kuwait’s $700 billion sovereign wealth fund. Higher oil prices have helped ease a cashflow crisis for the government, which had seen liquid assets in the treasury almost entirely depleted last year. 

Kuwait has had 17 governments and eight elections since 2006.

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