Corruption in Kuwait 22, September 2011
Posted by thegulfblog.com in Kuwait.Tags: Corruption, corruption kuwait, Kuwait
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Seven of Kuwait’s MPs are currently under investigation for corruption. This most recent round of accusation and counter accusation began when the National Bank of Kuwait and Kuwait Finance House reported suspicious transfers amounting to $92million between two members of Parliament.
There has been precious little reaction from Kuwait’s elite on this matter, which has fueled public anger which, it seems, is simply filling in the missing details with lurid suppositions of mass-corruption and graft in the Parliament.
Not that such assumptions are necessarily wrong. Kuwait has a long and illustrious history of corruption in the elite. Over the years, this issue has come up again and again to the point where many Kuwaitis (I’d even say ‘most’) seem to be of the opinion that the elite/government are implacably and irreducibly corrupt.
Through demonstrations and the voting in of populist MPs whose sole mandate, it can appear, is to fight this corruption, three highly damaging corollaries then occur:
1) MPs block crucial pieces of legislation from passing Parliament for fear that by granting, say, $5billion worth of investment in a real estate project, they are effectively allowing if not aiding and abetting corruption to occur. Kuwait is in desperate need of investment and it was only recently that a multiyear, $104billion plan was pushed through Parliament: the first in decades.
2) MPs also do their best to block similarly necessary pieces of privatization. Kuwait’s public sector, like many in the region, is hopelessly inefficient, expensive, over-staffed and bloated in general. Around 77% of Kuwaitis work in the public sector and a chilling, psychotic and whopping 84% of oil revenue is spent on public sector salaries, according to the World Bank in 2010 .
Necessary privatization bills are frequently derided as the ‘sale of Kuwait’ or ‘the legalized robbery of Kuwait’ and other such sensationalist tripe-filled notions. Famously, one such bill took over 18 years to pass through the Parliament. This is all the more surprising given the huge success in some industries which have been privatized – see Zain and Wataniya.
3) People demand cash. And debt relief. And no bills. And salary increases. And they get them, in spades. The government acquiesces to these demands to keep the natives vaguely silent: they essentially buy off citizens in droves. But the demands of Kuwaitis in the face of what they see as mounting and pervasive corruption is insatiable, even though they are the best paid of any nationals in the Gulf (where there is, let’s not forget, rather a lot of competition): it’s almost like that feel that they need to get their share before the elite graft it all away.
Indeed, Kuwaitis look at their staggering oil revenues, the small size of their country and then actually look around Kuwait, especially in comparison to the more glamorous cities further down the Gulf, and wonder where all their money has gone: ‘clearly’ it’s not been spent on Kuwait itself, so the elite must have stolen it all. This logic forgets, of course, the fact that Parliament can barely spend the cash (on big budget packages, at least) so tightly do some MPs agitate against any such plans.
It is difficult to overemphasize just how damaging this cycle is for Kuwait’s long term future. Kuwait can afford this now. Yet this will not always be the case. And when Kuwait needs to rely on income that is not derived from rent (oil), not only will it lack the infrastructure to pursue a ‘normal’ economy, such are the difficulties of investing in Kuwait to any significant or regular degree, but there must be core concerns that there will simply not be the Kuwaitis to staff any kind of competitive economy: neither trained particularly well nor with the skills or the drive to work efficiently and productively in a truly competitive economy, Kuwait will find itself at a considerable disadvantage.
Where to go from here? There are no easy answers, as the New York Times eloquently sums up.
If the emir allows Parliament to remain in place while at least one-fifth of its members are investigated for graft, he risks the growth of ever larger street protests and an erosion of public trust. But if he dissolves Parliament and calls for new elections, public outrage could help usher in a legislature hostile to the monarchy and more assertive in demands for constitutional changes.
However difficult, the current Emir, Sabah Al Sabah, simply must sort this out in some way, shape or form. He has genuine popularity and legitimacy in Kuwait as a whole. His successor is guaranteed none of these things and will likely endure questioning the likes of which would never happen to Sabah. Somehow he needs to marshal this to his advantage.
Kuwait needs a proverbial ‘truth and reconciliation’ commission. An opportunity for everyone to sit down, discuss what has gone on, make amends and to move forward on a new footing. Yet the recriminations and bitterness that characterises much of these interactions, coupled with astounding levels of obstinacy in the Government and – arguably – with a cultural aversion to public acts of contrition (can you really see an important Kuwaiti MP or member of the Cabinet publicly admitting he was corrupt?), makes such a scenario seem unfortunately unlikely.
Before the Arab Spring, I’d have said that there’d be a good chance that the Emir would unconstitutionally dissolve Parliament (as has happened a few times before) to pass some laws, push through some projects and to take the relentless pressure off his Governmnet as a whole and his PM in particular. But in this popular and febrile atmosphere, I don’t think that even Sabah’s charisma and support could pull it off.
Some kind of half-way-house would presumably involve the public flagellation of a couple of corrupt MPs. Give the mob some blood, show that the courts and the Parliament has teeth and scruples and follow this with exorbitantly punitive new anti-corruption laws and some kind of new independent body to pursue corruption with teeth. On the other side, scurrilously populist MPs would have to – against their shameful temporary interests – agree to hold their fire and resist the so far irresistible lure of the lowest common denominator elite bashing with the stick of assumed corruption.
Many would fear that this would give the mob the taste of blood while most would surely be loathe to cast out one of their own, perhaps knowing that it could have been them, yet the impasse is growing in size and acrimony. Something needs to give on one side and it hardly seems likely that the populist MPs or the Kuwaiti public will spontaneously forgive and forget.
Out of this morass is the opportunity for an MP to make his name; to mark himself (or herself) out as a whiter than white, judicious negotiator. Perhaps such a prize will convince a suitably powerful MP to stick his/her neck out, eschew the trends and to embody the would-be new politics of Kuwait.
Kuwait arrests Iraqi spy 8, September 2011
Posted by thegulfblog.com in Iraq, Kuwait.Tags: Iraq, Iraq Kuwait conflict, Iraqi spy, Iraqi spy caught in Kuwait, Kuwait
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The fun and games between Kuwait and Iraq continue apace.
Latest developments include the arrest of a man ‘of Iraqi origin’ for some kind of intelligence links with Iraq. The chap apparently liven in Hawalli, my old area of Kuwait (aaah…Abou Khodor…you are missed…) and worked for a communications company.
It’ll not before long such a spy is found in Iraq, I am sure, secreting secret stuff back to Kuwait. The tit for tat nature of this saga continues.
On Kuwait Airways privatisation 6, September 2011
Posted by thegulfblog.com in Kuwait.Tags: Kuwait Airways, privatisation, privatisation in kuwait, privatisation in the gulf, privatisation Kuwait Airways
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There’s a jolly interesting article written about Kuwait Airways and its privatisation, which begins with the line
After 18 years of political wrangling, the Kuwaiti parliament passed a privatisation law in May 2010 which proponents said would reinvigorate the country’s bureaucratic, public-sector dominated economy.
Now, I’ve written this line more or less exactly myself (including in here) and said it at various conferences and other talks on numerous occasions, but it bears a moment’s reflection. Nearly two decades for one law on privatization. We’re not talking about droit du seigneur or something here, but privatisation…it boggles the mind…but I digress (and must not harp on…).
Despite those maintaining that such privatisation will lead to
the robbery of the wealth of Kuwait and a plan to destroy the country
Kuwait Airways is raring to be sold. A horrible airline by regional standards (or even those of BA), it has been atrociously ran for decades.
The flag carrier posted losses in 20 of the last 21 years, hemorrhaging more than $3 billion including $556 million last year alone – a time when most airlines were rebounding from the global recession…the airline is bogged down by maintenance costs for its fleet, which has an average aircraft age of 18 years. A $3 billion order for 19 replacement jets had been touted as a landmark solution, but the deal was axed in 2007 after ministers voiced growing unease about pouring yet more money into the failing carrier.
…
Demographics in Kuwait could hardly be more favourable, with almost half the population under 30 years of age and disposable income among the highest anywhere in the world (GDP per capita is around $38,000, according to the International Monetary Fund). While tourism is virtually non-existent, the country’s large expatriate presence, coupled with its geographical location spells clear potential for establishing Kuwait City as an intercontinental hub.
Only last month…drum roll please…Kuwait began to move to become the first privatised flag carrier in the Gulf.
Given that their staffing costs are astronomically high, according to the article, staff were given a wonderfully Gulfy option.
Its 2,600 employees were recently asked to choose between joining the new operating company, transferring to another government entity, or taking retirement if eligible. Though the survey’s results have yet to be published, it is believed that most staff opted to retire or switch to another public body. “It cannot be implemented until the privatisation has occurred, but in terms of the cost element you’ll see a dramatic reduction from day one,” the source predicted. “They’ve rationalised the staff.”
Oh how BA and Virgin look on with undisguised contempt and envy.
This excellent article continues:
Perhaps the biggest worry for investors, though, is the sign that Kuwait Airways may not have learned the lessons of its troubled past. Buried in the teaser document for prospective bidders are several indications that the airline will continue to rely on state support, rather than free-market competitiveness.
On top of the ten per cent fuel discount afforded to all airlines at Kuwait International Airport, the flag carrier will benefit from an additional ten per cent markdown. It will also retain exclusive rights to transport government personnel, as well as enjoying subsidies on airport space rental and exemption from custom duty on aircraft parts used within the Gulf Cooperation Council. Critics say these privileges will do little to foster a culture of efficiency.
Oh how BA and Virgin are spluttering into their Cornflakes at reading this.
Hat tip: Kristian Coates Ulrichesn
Kuwait’s ‘special’ public sector 30, August 2011
Posted by thegulfblog.com in Kuwait.Tags: Kuwait, Kuwait public sector
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The General Inspection and Control Department of the Interior Ministry has reportedly summoned a police officer — a Lieutenant Colonel — for receiving his monthly salary on a regular basis although he has been absent from work for 18 months.
Is anyone surprised? Anyone? No; thought not. Just checking.
The worsening Kuwait Iraq relationship 26, July 2011
Posted by thegulfblog.com in Iraq, Kuwait.Tags: Iraq, Iraq Kuwait, Kuwait, Oil Iraq Kuwait, Slant drilling Iraq Kuwait, Stealing oil Iraq Kuwait
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I recently wrote an article for Foreign Affairs discussing the ever-worsening Kuwaiti-Iraqi relationship. You should give it a read.
I note today with neither joy nor vindication a further worsening of their relationship. Specifically, an Iraqi MP has accused Kuwait of stealing Iraq’s oil with ‘slant drilling’. This comment, as infuriating as it is by itself, is all the worse given the historical resonance with which it is loaded loaded: Saddam Hussein said the same thing as one of his pretexts for invading Kuwait.
At the moment the relationship is entering a spiral. Comments from deliberately provocative MPs on both sides purely designed to please a domestic audience are making things worse. This patch of deliberate provocation will pass.
Then, cool-headed MPs must prevail upon their counterparts to reset this relationship for everyone’s sake, using the real benefits which are possible should the two neighboring countries come together as a carrot. Needless to say, these MPs will have a hard time, for it is infinitely easier to prey on the public’s prickly fears and prejudices than it is to ask for a mature and long-term thinking approach.
Kuwait reaps the sectarian Gulf whirlwind 8, July 2011
Posted by thegulfblog.com in Kuwait.Tags: Kuwait, Kuwait parliament, Shia issues
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Kuwait’s Parliament is undergoing another crisis. The Deputy Prime Minister, Sheikh Ahmed Al Fahad Al Sabah, resigned in June rather than face an interpolation by disgruntled Members of Parliament (MPs). Though these interpolations are supposed to be a standard Parliamentary questioning tactic, in Kuwait they are described as ‘grillings’. They are usually highly accusatory, hostile and an ordeal that can last for hours on end. A grilling can be brought by any MP over any topic, though a quorum is needed to follow the grilling with a motion of no confidence. In the past MPs have used and abused interpolations to pursue their own partisan and disruptive agenda.
It is only since 2006 that it has been possible for the Prime Minister (PM) himself to be subject to a grilling. Previously, the Crown Prince was also the Prime Minister. But from 2003 to 2006, Sabah Al Sabah officially took over the title of PM from the ailing Crown Prince, Saad Al Sabah. This broke with tradition and the PM was now no longer also directly in line to the throne. The possibility of interpolating the PM thus emerged, though Sabah Al Sabah never faced this problem as it was clear that he would soon be Emir. His PM, Nasser Al Sabah and his governments, however, have had repeated problems.
Nasser’s first government was dissolved by the Emir when it was barely four months old after reformist MPs, in an unprecedented move, sought to grill the PM over issues regarding changes to electoral districts. In the new government there were, as always, a handful of changes in personnel, but the MPs had a solid majority and forced through the district changes that the Government and the Emir sought to block. Any notion of opposition unity after this success soon evaporated ‘leading to a situation in which highly factionalized parliamentarians use their tools with abandon in pursuit of no coherent agenda.’ [1]
Since then, the PM has faced another eight grilling requests by MPs and has formed seven cabinets in five years. In 2009 the Minister of the Interior became the first Royal Minister to face an interpolation and a subsequent vote of confidence as opposed to simply resigning beforehand. He passed and this ushered in a brief era of reconciliation. The PM followed suit in December 2009 and was grilled along with four other cabinet members in a twenty hour marathon session finishing at 5:30 in the morning. A motion of non-cooperation with the PM was soundly defeated with only thirteen of fifty MPs in support.
More recently, at the start of 2011 the PM faced another nine hour grilling and a subsequent motion of no confidence. Though he again passed, he did so only by a narrow and unconvincing three votes. Similarly, in June he passed though twenty four members of the fifty member Parliament either abstained or voted to oust him: hardly a resounding vote of confidence.
What exactly are the key issues which so frequently flare-up and cause such anguish in the Parliament?
Corruption and privatisation
An abiding concern of the Parliament is corruption. Given the billions upon billions of dollars swilling around Kuwait, MPs are in a perennial state of fear that the elite is creaming off millions of dollars that rightly belong to the Kuwaiti people. As with every country on earth, they have some justification for these fears. Examples range from classic ‘company fraud’, such as the long ago but not forgotten Kuwait Oil Tankers Company saga to examples involving individual MPs or even the Prime Minister himself. In the latter example, an MP paraded one of the PM’s personal cheques around Parliament which was, he claimed, a clear example of the PM trying to bribe a fellow MP. The PM wholly denied the charge.
Linked with the fear of corruption is a fear of privatisation. Numerous MPs see the privatisation of Kuwait’s industries as the legalised theft of Kuwait and bitterly oppose such laws when they come to Parliament. They cite fears that either Kuwait’s elite or foreign speculators will come in, take over and make huge profits while the price will rise for the services that they charge. To some degree, these fears are well founded. Profits can be made if an industry is well run and when heavy subsidies are taken away prices can go up as the market adjusts to the real price of the service. It was only under the temporary hiatus of tensions in mid-2010 that a privatization bill and other desperately needed economic stimulus packages (some eighteen years in the making) finally made it through Parliament.
Royal intrigue
Kuwait typically operates under the unwritten understanding that power in the form of the Emir would alternate between the Jabr and the Salim branches of the Al Sabah family. However, this cycle has been broken recently. Not only did Saad Al Sabah – from the Salim side – only reign for nine days due to severe illness, but the current Emir, Sabah al Sabah – from the Jabr side – installed his half-brother Nawaf Al Sabah as Crown Prince and his nephew Nasser Al Sabah as the Prime Minister. The Salim side have thus been significantly emasculated from power and this dynamic is believed to be contributing to the rancour and acrimony in the Parliament.
More generally, many MPs seem to be persistently aggrieved by the lack of changes in the makeup of the Cabinet. As has been noted, the current PM has formed seven Cabinets. Rarely do more than two or three Ministers change from one to the next. Moreover, the key posts of Defence, Interior and Foreign Affairs are always held in Al Sabah hands.
Iranian issues
The institutional and nigh-on perennial issues that have plagued Kuwait’s Parliament in recent decades have been further complicated and embittered by the recent surge in Sunni-Shia tensions in the Gulf. Saudi Arabia, ably and willingly abetted by Abu Dhabi and Bahrain, has deliberately foisted a sectarian lens onto the troubles in Bahrain. This has been done not only so that the states in question do not have to consider whether the Shia in Bahrain have legitimate grievances but because this suits their geopolitical world-view and fits their prejudices. Indeed, despite persistent accusations that Iran is ‘behind’ events in Bahrain there has been a stunning lack of evidence presented.
In contrast, specifically in Kuwait there is in fact evidence of Iranian involvement. A spy ring was discovered operating in the country and those involved were sentenced in May this year for passing on sensitive information to the Iranian Revolutionary Guard. This news stirred Kuwait’s Salafi MPs and the Iranian Ambassador in Kuwait was expelled.
Subsequently they protested loudly and demanded to grill the PM over the fact that Kuwait did not contribute troops to the Gulf Cooperative Council (GCC) military support of Bahrain. Also, in the face of what they see as blatant Iranian aggression, the PM hosted Iran’s Foreign Minister and agreed to the return of the Iranian Ambassador – all in a bid to dampen tensions. This further irritated the Salafis. Indeed, they accuse the PM, who speaks Farsi and is a former Ambassador in Tehran, of weakening Kuwait’s national security by taking these calming actions. A group of MPs sought and failed to force him to resign in June over these matters. Within minutes of their failure, they had again tabled another motion to grill the PM.
Nevertheless, while he is ever more the focus of these tensions, they are not confined to the PM. Indeed, a serious fist-fight broke out in Kuwait’s Parliament in May between Shia and Sunni MPs under the gaze of a group of American lawyers invited to watch proceedings.
Impasse
Sectarian relations in Kuwait are, therefore, at a low ebb. The Prime Minister is wholly caught up in this conflict and has countless other detractors; he is the lightening-rod for all criticism from large sections of MPs and the public alike. Indeed, at least two youth groups Al Soor Al Khamis (the fifth wall) and Kafi (enough) have emerged recently, that have protested for the ousting of the Prime Minister.
The way forward for Kuwait is not at all clear.
It seems inconceivable that the Prime Minister could ever marshal an effective and compliant Parliament; his bitter history as the focus of the opposition’s ire, now compounded by his involvement in sectarian issues, makes him profoundly estranged. Even if this Parliament can stumble to its four month-long recess, the chances of everyone ‘forgiving and forgetting’ when the new term starts are slim to nil, even if the worst of the sectarian tensions are over.
Twice before has the Kuwaiti Emir unconstitutionally dissolved Parliament (i.e. dissolved it but did not reinstate it within the stipulated time frame). Sabah Al Sabah has insisted that he will not do this, even though he would be able to pass numerous important laws and packages that are currently jammed in the Parliament. Were he to do so, while some may feel that this would be a reasonable response to Parliament’s unedifying and damaging behaviour of late, in an era of Revolutionary fervour, there would soon be immense pressure on him to re-instigate the Parliament. Choosing another PM would be seen as a sign of weakness and would by no means guarantee a more pliant Parliament, yet, for lack of other options, it is one of the few tenable alternatives available.
NOTES
1 Nathan Brown ‘Moving Out of Kuwait’s Political Impasse’ Carnegie Endowment for International Peace (June 2009)
2 Habib Toumi ‘Kuwait no-cooperation motion unlikely to pass’ Gulf News 19 June 2011
Torture of a Kuwaiti: Minister resigns 17, January 2011
Posted by thegulfblog.com in Kuwait.Tags: Kuwait's interior minister resigns, Kuwait's Parliament, Torture, Torture in Kuwait, Torture in Kuwait police station
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Last week a Kuwaiti, Mohammad Ghazzai al-Mutair, died in a police station as a result of “excessive torture”. He had been arrested in Ahamdi in Kuwait’s south transporting 24 bottles of Whiskey; something that is wholly illegal in Kuwait.
An opposition MP who investigated the claim said that he had been ‘brutally tortured and had a stick inserted into his anus’ and he arrived at hospital with his hands and feet tied.
The Kuwaiti Minister of Interior, Sheikh Jabir Al Sabah, submitted his resignation after persistent demands, while 5 policemen have been suspended.
While there are many serious flaws with Kuwait’s Parliament and issues with its ingrained rentireism (as I often note), there cannot be many Arab countries where their national print media would have followed such a case and where the national representative body could force the resignation of a Royal Minister.
Free food & over $3500 for Kuwaitis 17, January 2011
Posted by thegulfblog.com in Kuwait.Tags: Kuwait, Kuwait independence day, Kuwait national day, Rentier state
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Sometimes it can be tricky to come up with a definition of the rentier state; sometimes not.
On the occasion of Kuwait’s 50th anniversary of its independence from the British and its 20th anniversary of its liberation from Iraq, the Emir Sabah al Sabah is giving every Kuwaiti 1000 dinars or $3560 as well as 13 months of free food rations.
Several points now come to mind:
- Given that Kuwait is arguably on the brink (again) of serious issues in its Parliament, this may be a wise decision to try to placate all sides for a (short period of) time.
- I don’t quite understand the food stamps. Aside from simply being given 1000 KD, Kuwaitis have one of the most generous welfare states on earth (guaranteed jobs, ‘free’ loans then loan forgiveness, no taxes, no bills etc etc). Why would such a population who are – let’s be blunt here – very rich need food stamps? Perhaps it is some traditional-paternal ritual that the Emir wants to keep alive.
- Overall, I fear very greatly that these kinds of handouts are harmful for the longer term. Instilling in Kuwaitis more so than is already the case that they are owed free money, food and opportunities simply because they are Kuwaitis and not because of anything that they have done is a grim precedent to set. Emir after Emir will be forced to follow suit dishing out these bonuses for (again) nothing. Eventually, as Kuwait’s oil whittles down and it has to rely ever more on its (substantial) financial investments [for there is no meaningful sign of industrial diversification yet], such bonuses will become costlier and costlier for the Government to give out. Yet a population weened on such gifts will not give them up readily. Essentially, I see Sabah giving out this cash now as storing up huge problems for his great-grandchildren when they come to rule.
Kuwaiti PM survives vote of no confidence 5, January 2011
Posted by thegulfblog.com in Kuwait.Tags: Kuwait parliament, Kuwait Prime Minister, Prime Minister grilling, Prime Minister Kuwait survives
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Kuwait’s Prime Minister, Sheikh Nasser Al Mohammmed, a nephew of the Emir, today survived a vote of no confidence. This is despite small rallies outside MPs’ houses to pressure them to vote against the PM. In the end 25 MPs supported the PM while 22 were against with one abstaining. 25 votes are needed to pass the motion.
This is the eighth time that he has had such a motion lodged against him. On six of these occasions, Parliament was dissolved, he resigned or the Cabinet was reshuffled by the Emir to avoid the spectacle of the Royal PM being subjected to such a fate. The penultimate occasion saw Al Mohammed stand his ground and win comfortably. This ushered in a period of relative calm and cooperation between the Government and the Parliament where – for once – crucially important long term projects were pushed through.
The current ‘grilling’ (interpolation) and subsequent vote of confidence stems from a growing anger by opposition groups who feel that the Government is slowly but surely seeking to reduce their influence. A peaceful gathering outside an MPs house that was harshly broken up by Kuwaiti Special Forces a few weeks ago injuring several MPs was the final straw.
Many at the gathering were protesting to preempt what they feared was the government plotting to amend the 1962 constitution to weaken political and other civil guarantees therein. Al Jazeera was banned from Kuwait after covering the reaction of the police.
The key question now is whether the Parliament will return to its intransigent past or move on. Around the 6th and 7th attempted grilling of the PM in 2009, there were real fears of an unconstitutional break in the Parliament by the Emir, such was the degree to which necessary bills and laws were not being passed.
Unfortunately, the opposition appears to be set on removing the PM and could resort to their earlier tactics of seeking to ‘grill’ him over minor, relatively inconsequential matters. They know perfectly well that this is likely to anger the government and once again policy decisions will grind to a halt.
