Greetings to Mohammad Al-Hashel
THE Governor of the Central Bank of Kuwait His Excellency Dr Mohammad Al-Hashel, we were quite optimistic about the stimulus financial package that was aimed at allocating KD five billion for helping the local banks perform their duties in providing more loans to fund the productive economy sectors and their clients who are in need of liquidity to enable them to continue their activities without interruption. However, hopes have fallen in this regard.
We supported that stimulus plan of yours with the hope that it would provide financial capabilities to help the private sector. Unfortunately, the outcome we saw is delay in loan installments. This prompted the banks to vow the repayment of such loans immediately after the current challenging conditions subside, without rescheduling the installments and interests incurred throughout the months of repayment delay.
However, reality dictates that none of the clients will have cash flow after the grace period due to the fact that businesses will be at halt. There is nothing in the horizon that indicates the businesses will resume their activities soon. This means there will be no financial returns that would help investors and businesses to fulfill their repayment vows.
In fact, the private sector was looking forward to the cancellation of these interests – a move that has been adopted by majority of the countries in the world. There are countries that have pledged to pay the salaries of citizens working in the private sector such as Saudi Arabia, the United Arab Emirates and Qatar.
In Bahrain, the government has ordered local banks to loan to companies and establishments the salaries of their employees, which will be for a period of eight months at a very low interest rate, and schedule the repayment on a long term basis, not immediately after the current crisis as decided in Kuwait.
On this basis, the private sector would appreciate if the government follows the example of the rest of the Gulf Cooperation Council countries in terms of the salaries. The measures should be more flexible. The matter should not be handled on the basis of fear from the voices of those who are not experts or those do not understand the basis of the country’s economy.
The whole world is today working on avoiding the negative consequences of the current crisis. Experts and decisionmakers are looking at major support steps that would pump hundreds of billions of dollars into the markets. The governments are imposing banks to provide great facilities for payment but in Kuwait, the government is still afraid to take such steps. All that it is doing is bowing to the pressure imposed by some of the MPs.
These MPs and their likes are seeking electoral gains, and do not care about the economic situation. Rather, they may appreciate the increase in financial problems as an opportunity for them to strengthen their positions by toying with the emotions of the voters.
In reality, the situation does not tolerate any maneuvers and adventures that will undoubtedly result in a deep financial and economic crisis in which the citizens will be ones who will end up paying the price.