Kuwait City, May 13: Kuwait’s parliament passed a privatisation bill on Wednesday to open up the dominant public sector to private ownership, but excluding oil and gas production, health and education.
Following an eight-hour debate, 33 MPs, including 15 cabinet ministers, voted in favour of the bill, which was opposed by 28 lawmakers who described it as “legislation for the robbery of Kuwait.”
“This is a law for the robbery of the country’s wealth … and a plan to destroy this country,” independent tribal MP Shuaib al-Muwaizri said during the debate.
“Ninety-five percent of Kuwaitis depend on their salary while five percent represent the influential minority,” independent MP Khaled al-Adwah said.
“Approving the law is like taking the side of the influential minority at the expense of the ordinary people.”
Opponents said the law does not contain sufficient guarantees to safeguard the interests of Kuwaiti employees.
But according to the law, 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.
More than 77 percent of the 350,000-strong Kuwaiti workforce are employed in the government, which pays handsome salaries on jobs that are less demanding.
Conservative MP Khaled Sultan insisted that Kuwait has no other option for privatisation to create jobs for nationals.
“Over the next 16 years, between 460,000 and 480,000 citizens will enter the labour market and there is no way the government will be able to create enough jobs for them,” Sultan said.
But Helal al-Dhafiri, an employee at the ministry of Islamic affairs, said he thinks the law is a threat to the future.
“I feel this law is a threat to me and to the future of my children who may not find jobs. Private companies will seek to make profit and will look for cheaper staff, mostly expats,” the 27-year-old accountant said.
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 by foreign firms.
It stipulates a blanket ban on the privatisation of oil and gas production, oil refineries, and health and education services, after a large number of MPs said they were concerned about the future of these sensitive sectors.
The new law envisages the creation of a higher privatisation council, headed by the prime minister, which will oversee and regulate the sale of public services to the private sector.
Before privatising any public service or utility, a public shareholding company operating in accordance with Islamic law should be established in which 40 percent of its shares will be sold to Kuwaiti citizens in an initial public offering.
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.
Under the law, the government has a so-called golden share in the privatised company, which provides it with veto powers over any decision.
Oil income makes up 95 percent of total revenues in Kuwait, which offers a cradle-to-grave welfare system for its citizens, including heavily subsidised or free services, and has no income tax.
The Gulf state has a 1.1 million native population in addition to 2.35 million foreign residents. It pumps around 2.3 million barrels per day.
“We are a country that sells oil to pay salaries. In the near future we may not be able to do that,” liberal MP Marzouk al-Ghanem said.
–Agencies