Impasse Broken, but Stability at Risk
Since taking the throne in 2006, Emir Sabah’s staunch defense of royal prerogatives has contributed to a deepening division between the executive and legislative branches, in the process shrinking the potential for reaching the compromises required to secure approval of reform legislation that in some cases has been gathering dust for years. However, a breakthrough of sorts was made at yet another early election held on December 1, thanks to an opposition boycott that resulted in a large pro-government majority in the Parliament.
The self-imposed exclusion of nearly all government opponents from the Parliament presumably will facilitate the process of approving stalled reforms, resulting in a more attractive climate for foreign investment. However, the opposition has vowed to use all non-violent means at its disposal to force the annulment of the elections, a warning that points to a significant risk of disruptive political protests that could escalate rapidly if the government responds in a heavy-handed manner.
The composition of the new Parliament is not an unmitigated blessing for the emir. On the one hand, popular perceptions of the Parliament as a rubber stamp that lacks popular legitimacy could provide the opposition with a useful touchstone for building support for its democratization agenda. On the other hand, the many first-time lawmakers in the current Parliament are keen to make a lasting impression on their constituents, a goal that is frequently at odds with the interests of Emir Sabah. The recent approval of a bailout for indebted households, an expensive and controversial program vehemently opposed by Finance Minister Mustafa Shamali, is a case in point.
That said, it is probably safe to say that several pieces of legislation that are crucial to the success of the $107 billion development plan unveiled by the government three years ago stand a fairly good chance of being approved. What that means for a controversial proposal to open the country’s northern oil fields to foreign investors remains to be seen, but the government is pressing ahead with bidding for major downstream investments, including a clean-fuels project and the construction of a new refinery in the southern region of Al-Nour for the Kuwait National Petroleum Company. The projects are valued at a total of $30 billion, involving a total of eight contracts.
|SUMMARY OF 18-MONTH FORECAST|
|REGIMES & PROBABILITIES||Al-Sabah Family 60%||Limited Monarchy 35%||Fundamentalists 5%|
|Turmoil||Low||SLIGHTLY MORE||MORE||MUCH MORE|
|Tariffs||Moderate||SLIGHTLY LESS||SLIGHTLY LESS||MORE|
|Other Barriers||High||SLIGHTLY LESS||SLIGHTLY MORE||MORE|
|Payment Delays||Low||Same||SLIGHTLY MORE||MUCH MORE|
|Foreign Debt||Low||Same||SLIGHTLY MORE||MORE|
|SUMMARY OF FIVE-YEAR FORECAST|
|REGIMES & PROBABILITIES||Al-Sabah Family 55%||Limited Monarchy 40%||Fundamentalists 5%|
|Turmoil||Low||Same||SLIGHTLY MORE||MUCH MORE|
|Trade||Moderate||SLIGHTLY LESS||SLIGHTLY MORE||MORE|
|* When present, indicates forecast of a new regime|
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