The Gulf blog

Corruption in Kuwait 22, September 2011

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.