(Reuters) - Economic reform plans are at the heart of parliamentary elections that OPEC member Kuwait is holding on Saturday.
The world’s seventh-largest oil exporter wants to diversify its economy and emulate the success of Gulf Arab commercial hub Dubai, but several reforms had been delayed in parliament due to a long-running standoff with the government.
Parliament has to approve all laws and Kuwait’s budget. Following is a list of the status of major economic reform plans.
- Parliament approved in January the sale of loss-making national carrier Kuwait Airways within two years.
- Deputies approved in December a government-sponsored bill to cut tax on foreign firms to a flat 15 percent from up to 55 percent previously. Gains on the stock market will be tax-free for foreign investors.
- Parliament also approved a bill to outsource more activities such as warehousing facilities.
- Project Kuwait, a plan to pump more oil from northern fields to help boost crude output, has never made it beyond committee level because of Islamist and tribal MPs opposition to the involvement of Western companies in oil and gas production. Kuwait’s fields are off-limits to foreign investors. The multi-billion dollar project has been on hold for over a decade.
Oil officials have tried to solve the problem of how to get international oil firms involved without signing away rights to oil and gas reserves through a series of new service contracts that do not require parliamentary approval. The contracts cover different areas than those included in Project Kuwait.
- Parliament has yet to pass a law establishing a financial regulator to supervise and bring more transparency to the Arab world’s second-largest bourse, which has been hit by a string of irregularities. The government hopes to attract more foreign investors with the law, which is seen as crucial to diversifying the economy and boosting the financial sector.
- Kuwait’s government wants to speed up the sale of state firms and increase the private sector’s role in investments but parliament has yet to approve a privatisation bill.
- Kuwait wants to privatise the oil sector to revitalise the country’s largest source of revenue but has said it would not go ahead with such plans unless MPs give up resistance. Many MPs have rejected the plan, fearing Kuwaitis might lose their jobs.
- The government wants to establish Kuwait as a centre for options and derivatives trading but has yet to unveil details.
- Kuwait is seeking to create a regulator for the telecommunications sector but the government has not presented a bill to parliament so far.
- The government has also said it wants to allow foreigners to own property as they are allowed to in Dubai and Bahrain but no details have emerged yet.
Reporting by Ulf Laessing; Editing by Lin Noueihed and Samia Nakhoul