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The government to the rescue

The government to the rescue

The Kuwaiti Cabinet approved a rescue package in ‘principle’. The Kuwait Times reveals the package and how it may affect the nation’s ailing economy

February 3, 2009 12:16 by

The Cabinet yesterday approved in principle a rescue package of the national economy and asked an economic task force to prepare the final form of the package for approval by the Cabinet. The package is aimed at stabilizing the economy and saving it from the fallout of the global financial crisis. It calls for providing urgent aid to troubled investment companies that are unable to repay their debts.

The plan was presented by governor of the Central Bank of Kuwait, Sheikh Salem Abdulaziz Al-Sabah,  who heads a task force set up to deal with the impact of the global financial crisis on the state. “The Cabinet asked the task force to study comments and amendments made (by ministers) to the draft legislation and submit it to the Cabinet in its final form for approval and referral to parliament,” an official statement said.

According to reports, the package calls for using KD4 billion (AED49.6 billion) in public funds to rescue troubled firms and shore up the domestic economy. The scheme also envisages the state purchasing toxic assets to shore up the banking sector. The National Assembly is due to debate the plan on February 10 after its economic and financial affairs committee has reviewed the package.

A number of MPs are opposed to the plan and especially the use of public funds to bail out mismanaged companies, and want that the companies’ officials to be held accountable before aid is made available to them. They also want the government to purchase billions of dinars in debts owed by citizens to local banks and investment firms.

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