Hard-liners' win in Kuwait puts reformers' goals in doubt

The vote was meant to resolve a two-year political standoff between parliamentarians and the country's cabinet ministers. But after hard-line Islamists and tribal leaders scored major victories in Saturday's parliamentary poll, many say the bickering will only continue, keeping this oil-rich nation from catching up to its booming Gulf neighbors.

The speedy economic development in Dubai and Qatar, the newly glitzy emirates where democracy doesn't get in the way of business, loomed large in the election here. Many Kuwaitis blame both the government and the parliament for the lack of progress even though the country had $32.7 billion surplus for the 2007-08 fiscal year.

"Kuwaitis are very disappointed at being left behind in terms of advancement [compared] to their [Gulf] neighbors, especially since Kuwait led the region up until the '80s," says Suliman al-Atiqi, a management student at the American University of Kuwait.

"Kuwait has now definitely acknowledged the competition ... and seems very eager for a comeback. A comeback however will only be under way should the government privatize further government-controlled fields and find a way to make business easier to conduct from a bureaucratic level," he says.

Islamist and tribal MPs have traditionally rejected government proposals for economic reform, preferring instead to perpetuate a cradle-to-grave welfare system. For example, in the last parliament, tribal and Islamist MPs supported a proposal to forgive Kuwaiti citizens personal debt estimated at more than 4.6 billion dinars (about $17 billion). The government balked at the plan but later agreed to set up a fund to help debt-ridden Kuwaitis, many of whom face jail terms when they default on loans.

Kuwait has a long history of democratic engagement. Its first parliament sat in 1963 and Kuwaitis strongly back rule of law and the Constitution. Even so the parliament has been dissolved five times, three times by the previous emir – in 1976 for five years, in 1986 for six years and again in 1999.

The oil-rich country's Emir Sheikh Sabah al-Ahmed al-Sabah dissolved parliament in March, the second time in two years, after a series of political crises in the Organization of Petroleum Exporting Countries' (OPEC) fourth-largest oil producer. Since the June 2006 elections, four cabinets have resigned, several ministers have been reshuffled or have resigned in order to avoid questioning by parliament or face a vote of no confidence.

In Saturday's vote, tribal MPs took 23 seats in the assembly, hard-line Islamists won 11 seats, liberals took 11 seats, and Shiite candidates won five seats.

While 27 female candidates were running, not a single woman won a seat in the 50-member majlis, or legislative body. Women make up 55 percent of the 361,700 eligible voters. This is only the second time women have been eligible to run for parliamentary elections after winning the right to vote in May 2005.

More than half of Kuwait's population is under the age of 25. During the run-up to the 2006 parliamentary polls, Kuwait's young people engaged enthusiastically in the campaigns – backing candidates, writing blogs, and attending opposition protests. This time around, however, voters said that they felt more cynicism than optimism about the outcome of the elections and a new parliament.

"In order for faster economic reforms to take place the notion of waiting for the parliament to take place is a joke," opines a young Kuwaiti, Osama al-Sadi.

Privatization and economic reform, however, are controversial issues in Kuwait. Parliamentary intransigence has stalled legislation on critical development projects like the $20 Project Kuwait, intended to expand Kuwait's oil exports from the current 2.6 million barrels per day (b.p.d) to 4 million b.p.d by 2020 by opening northern oil fields to foreign investment through specialized service contracts.

Fifteen-year old plans for the sell-off of state-owned industries have languished in parliament, with opposition coming mostly from tribal and Islamist MPs, who derive their main support from citizens who work in the public sector.

Indeed, the only substantive legislation the parliament and government have been able to agree upon was a much-delayed law to lower the flat tax on foreign firms operating in Kuwait. In December 2007, the government finally won parliament approval to lower the tax from 55 percent to 15 percent. In January, the parliament finally agreed after five years of discussion to privatize the profit-losing state airline, Kuwait Airways.

Even so, privatization is expected to take years to accomplish and employees unions and parliamentary committees have both come out in opposition to the plan.

Inflation has further stoked frustration among the country's 1.4 million citizens. Housing costs have jumped 12.6 percent and food costs are up more than 6 percent. Higher government spending and a raise for public service sector employees – 90 percent of which are Kuwaiti nationals – have failed to satisfy growing dissatisfaction with the country's state of economic affairs.

"Kuwait's medium-term outlook is highly favorable, driven by strong growth in the non-oil economy due to high oil prices and infrastructure spending. It is important that structural reforms to support private investment continue," says a spokesperson in the Middle East and Central Asia Department of the International Monetary Fund.

But already rumors and speculation are circulating that this parliament won't last two years. The emir has the power to dissolve it at any time.