Kuwait City, April 16: Kuwait’s parliament approved the first reading of a privatisation bill on Thursday that has drawn strong protests from the opposition and trade unions and accusations of selling off the country.
Thirty-three MPs backed the bill, including all cabinet ministers. Ten voted against the measure during a noisy session that saw 17 opponents walk out of the chamber during the vote.
Guards at the parliament evicted a number of trade unionists who protested against the legislation from the gallery.
“This is a law for the sale of Kuwait. It will seriously harm Kuwait’s middle class people and workers,” said opposition MP Khaled al-Tahus before he stormed out of the session in protest.
Opposition MP Mussallam al-Barrak called on trade unions to gather outside parliament to protest against the bill, while MP Falah al-Sawwagh warned that a nationwide strike could take place if the bill won final approval.
But Islamist MP Khaled al-Sultan said privatisation is “inevitable for Kuwait which has no other option” to meet a growing number of job-seekers that the public sector cannot accommodate.
The second and final round of voting is to take place in at least two weeks after parliament’s financial panel studies a number of amendments submitted by MPs.
The bill, first proposed in the oil-rich Gulf state about 18 years ago, practically opens public services and state-owned companies to private ownership including foreign companies.
Oil and gas production, health and education services are excluded from the bill but can still be privatised with a special law for each of these services and for a limited duration with regard to oil.
The legislation stipulates creation of a higher privatisation council to be headed by the prime minister which would oversee and regulate the sale of public services to the private sector.
Before privatising any public service or utility, a public shareholding company should be established in which 40 percent of its shares would be sold to Kuwaiti citizens in an initial public offering (IPO).
Up to 20 percent of the shares will be held by the government, five percent will be distributed to Kuwaiti employees and the remaining 35 percent sold at auction to a strategic local or foreign investor.
Kuwaiti staff employed by the privatisation-bound facility would have the right to remain in their jobs for at least five years at the same salary.
Over 77 percent of the 350,000-strong Kuwaiti workforce are employed in the government, which pays handsome salaries on jobs that are less demanding.
MPs supporting the law said the government is faced with a serious case of “masked unemployment.”
Kuwait’s public sector is dominant and accounts for more than 70 percent of Gross Domestic Product, but is considered bureaucratic and in need of reforms.
More than 94 percent of Kuwait’s revenues come from oil. The Gulf state has a 1.1 million native population in addition to 2.35 million foreign residents.
The emirate provides a cradle-to-grave welfare system for its citizens with most services free or heavily subsidised, and people pay no taxes.
—Agencies