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Kuwait: how much is enough to write off citizens’ debts?

Kuwaiti money changer counts Kuwait dinars in his downtown Kuwait City shopBetween 2002 and 2008, many Kuwaiti nationals contracted heavy debts but were in no position to refund the banks. As many citizens found themselves in bankruptcy because of these debts, the issue was brought up in parliament. The committee of economic and financial affairs voted unanimously a bill that would write-off the debt or grant a 1,000 Kuwaiti Dinar allowance to the borrowers who do not benefit from the cancellation.
This bill was welcomed by Kuwaitis and Mps but seems to have little chance to be endorsed by the government which had opposed a similar bill proposed in 2010. In Kuwait, the government has the power to approve or not bills when its opposition to a measure does not lead the Kuwaiti assembly itself to vote against it.
The government argues that the bill, to draw on the state’s regular budget about 1.6 billion Kdinars according to first estimates, would be very costly and would encourage people to borrow more and rely on the government’s help to pay their installments.
The Kuwaiti state’s budget has been increasingly inflated over the past few years, in view of wage increases, subsidies and direct transfers, as in 2011 when all nationals were granted 1,000-dinar on the occasion of the commemoration of the country’s 50th independence anniversary and the 20th anniversary of the liberation of the state from Iraqi occupation.

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Posted by on Jan 30 2013. Filed under Finance, Gulf News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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