‘Govt should approve financial rescue package at the earliest’

KUWAIT CITY, March 16: The government should approve the financial rescue package as soon as possible because many local banks and investment companies have been hit hard as they were engaged in borrowing, lending and re-lending operations in the global markets, says Labeed Abdal, Constitutional expert and Head of the International Committee at the Kuwait Bar Association. Talking to the Arab Times on Monday, Abdal went on to say that Kuwait needs to issue new laws to protect the local investment companies and public funds. Replying to a question as to which of the sectors of the local economy had been worst affected by the slowdown, he said that the sectors that are witnessing a slowdown include: construction and that it needs more governmental spending in development projects to revive the upward mobility of the economy.

“In essence, Kuwait should forge ahead with many important projects but sadly the Parliament is soft-pedaling on issues such as the development of Failaka Island, Boubyan Port, Sheikh Jaber Al-Ahmad Bridge and renovation of the Kuwait International Airport.” Abdal also said that the government was successful in convincing the Parliament to issue the law in protecting the fixed deposits in the local banks and that this gave big relief to local banks and individual investors. Abdal also said that the new law should consider the default in payment of the loans involving the citizens which many MPs are raising, as some banks illegally, started to file for claims against debtors.

To a question whether he was expecting any big job losses in Kuwait, he said that “It is already happening as many companies from different fields, education, investment, banking etc. have laid off their workers.” “Here we must say the Kuwait labor law is against any illegal terminations, especially if it was against the contract that does not permit decreasing the salary or making any deductions without the consent of the employee.”

Kuwait, including its GCC peers can weather the economic crisis, given their considerable money reserves in their respective budgets, he added. He went on to say that the GCC countries should shun protectionism and join international efforts to stimulate the global economy and that Kuwait should also channel its efforts in developing more international trade links. “I am of the view that Kuwait should use the current situation to make prudent investments and we have the resources to do so,” he added. He added that the UAE government was quick to render financial support to the local economy and that this move paid off because the foreign investors stood their ground and did not pull out their money from the market.

Abdal noted that the matter of the financial crisis is not only a local matter but also has an international dimension, given the “new extreme differences between the countries in the financial position, specially the size of the public debts, which will effect the size of projects and the employment in general.” “That might affect the whole world and could lead to a new era with big changes, like the emergence of a new world order which might make new powers start to appear on the international arena and others might disappear,” he added. “Again this requires strong combined efforts and advanced steps toward repositioning in the new global political changes which might come to surface as a result of the economical factors. This could have a direct or indirect bearing on global peace and security,” he concluded.

By Francis A. Clifford Cardozo
Arab Times Staff


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