‘Economic crisis talk of the town’

‘Borrowing one of the options on table’

“IN ADDITION to the humanitarian crisis and the deficiency of health systems at the world level, the unprecedented economic crisis is considered one of the most important threats facing the countries of the world – including Kuwait – as a result of the spread of the new Corona epidemic,” columnist Dr Hamad Mohammad Al-Matar wrote for Al-Qabas daily.

“A majority of countries are working to take economic measures to confront this crisis, and lay plans to encounter it, especially if this catastrophe continues for months.

“Kuwait is not an exception, but rather it is one of the countries facing a complex economic crisis as a result of the sharp decline in oil prices due to the global epidemic crisis, and because of the competition from major producing countries and their lack of agreement on production quotas that guarantee reasonable prices for a barrel of oil.

“It is no secret to anyone that the Kuwaiti economy depends on a single source of income, which is oil, and with the escalation of this crisis and the halt of economic activity in the country as a result of measures taken to confront the epidemic, the Kuwaiti government will face a liquidity crisis in public revenues and a budget deficit that may reach relatively large numbers.

“Such being the case the government will have no choice other than resorting to difficult solutions, including borrowing as a short-term solution that enables it to go beyond the crisis without catastrophic consequences.

“However, those who are currently following the economic and political scenario will find that this crisis has imposed itself on everyone and has become the talk of all politicians, observers and followers.

“This crisis needs to propose solutions to it by specialists who understand the long-term consequences of economic plans, and therefore we must leave the discussion in this regard to the economists who are many in Kuwait.

“We suggest the concerned authorities must seek the help of international economic institutions to propose solutions and benefit from the experiences of other countries, because it is a global crisis not local or regional.

“Kuwait, as we have mentioned, is replete with economic expertise and trustworthy elements.

“In this context the government can seek technical assistance from these experiences, and it is possible to refer in this context to Dr Mohammad Al-Hashel, the governor of the Central Bank of Kuwait for his great economic experiences, at local and international level, whether in his current position or his previous experiences in the International Monetary Fund and Arab Monetary Fund (AMF) and so on.

“On the other hand, if borrowing is the solution to this crisis, these loans must be conditional, and they should be Islamic loans.

“Apart from the above, work must be done to stop corruption and address it before offering any remedies to the economic file, because corruption was and is still one of the most important causes of waste and abortion of economic plans.

“Therefore, every treatment of the economic file in the presence of corruption is a kind of manipulation particularly since we know that the aspects of corruption are many and multiple, whether they are tenders which are tailored to meet the size of some specific persons or proposing of unnecessary projects or through the implementation of some projects against certain privileges to be given to some specific authorities or persons.

“Borrowing cannot constitute a real solution to economic crises, but it may sometimes be a temporary remedy, and it requires that the government develop clear plans to guarantee the disbursement of funds in a way that helps the Kuwaiti society to cross the current crisis, as well as not to resort to borrowing again.

“Besides, borrowing requires a clear vision to reform the Kuwaiti economy so that it can respond to any future crises.”

Also:

Dr Al-Matar

“The world is currently passing through a choking health crisis which has been caused by (COVID-19),” columnist and attorney Riyadh Al-Sanea’a wrote for Annahar daily.

“The world is suffering of another economic crisis due the collapse of the oil prices because the issue has not been handled properly and this will contribute to the aggravation of the health crisis because the oil producing and exporting countries will need abundant finances to encounter the pandemic.

“The oil importing countries will need health apparatus to use all its potentials amid this pandemic and this means the crisis shall remain a topic for international arguments at least until the Organization of Petroleum Exporting Countries (OPEC) meet to discuss the issue.

“However, the oil crisis surfaced following the drop in the oil prices and increase in the oil output and this is what has been done by the Kingdom of Saudi Arabia in response to Russia’s non-cooperation in the field of coordination of oil prices.

“Anyway, some people say that the world is not in a position to deal properly with the issue of oil prices, but these people say that although the drop in the oil prices is uncomfortable this position is not catastrophic.

“In this context, we say Washington has threatened to impose sanctions on Moscow to force the latter to reduce its oil production, while the Kremlin in turn considers the drop in the oil prices as seasonal madness due to the spread of coronavirus.

“For its part, the Vitol Oil Trading Company has warned the global demand for oil will slow by more than 10 percent and this will coincide with Europeans going into the shell as they fight the coronavirus.

“Given the above, it is impossible to expect the duration when the demand for oil will increase in terms because this depends on the spread of coronavirus and the number of the states that shall follow the example of Italy in terms ‘isolation’.

“Here, we say Iran, Iraq and Venezuela will be involved in a long chain of problems, wars and crises, as we have seen what has happened with the Kingdom of Saudi Arabia and Russia to become the major oil exporting countries in addition to a third rival, the shale oil which surfaced following the US decision to lift the ban that was imposed on oil exports after 40 years and this has negatively affected the balance in the international oil markets.

“This development has created more competition before the other type of global crude oil which is similar to the light shale oil such as the North Sea oil, the Libyan oil and the Algerian oil and this has mainly and negatively affected the oil of West Africa (Nigeria and Angola).”

“Charles Bonaparte was born on June 9, 1851 in

Baltimore. He died there of cholera after spending 70 years as a lawyer and liberal political activist. He had graduated from Harvard Law School and worked in the Cabinet when Roosevelt was the president”, Bader Khalid Al-Bahar wrote for Al-Qabas daily.

“Charles, who is the grandson of the brother of the legendary Napoleon Bonaparte, was appointed as Minister of the Navy, and later became the Attorney General and founded what later became known in America as the FBI.

“He was active in fighting for the rights of the black population in his city. Exactly 100 years after the birth of Bonaparte, on June 9th the press gave birth to Muhammad Jassim Al-Saqer, making him, in our opinion, a veteran politician who could not stand the dome of the Kuwaiti Parliament where he spent 10 years before leaving.

“Perhaps the local matter did not seek aggressiveness of the journalist and politician Al-Saqer, so he set out to formulate the idea of legislation and oversight outside the borders. For four years he was the President of the Arab Parliament. He is the first Arab deputy in the International Parliament Union and head of the Arab Group. He is still the President of the Council on Arab and International Relations.

“We browsed through history and found a milestone in the local and Arab press. Al-Saqer has international relations, and his audacity is unprecedented in making news. He has the ability to confront opponents and be at the heart of the event to reach the decision-makers of war and peace. He is known to have the kind of boldness that sometimes reaches madness because it almost took his life more than once; it also killed Naji Al-Ali.

“We also followed the history of Parliament and found him to be a fierce opponent. He revealed one of the largest thefts of public money with a ferocity that did not go beyond the traditional norms of classic opposition politics. When the government exaggerated the use of its tools to confront its opponents and exceeded the norm in supporting its supporters after the multimillion deposits, we noticed that time that Al-Saqer decided to move away quietly. In our opinion, it was aimed to ensure he did not slip into a political scene that he did not belong to.

“He said transparently with a program of illuminations, ‘I do not think I can do anything under the current conditions’, describing his departure from abstention. We do not see this inconsistent with a personality like Al-Saqer, except that the timing of his exit is ultra-accurate, as the parliamentary life after him declined.

“We first talked about Charles Bonaparte because we found it an irreplaceable opportunity to compare the political performances of the two characters born on the same day and sought change for the better. The first character worked in a real democratic environment and other with incomplete democracy; the first was created and the second was played and carved.

“Al-Saqer’s recent interview on Al-Arabiya TV is part of the features of the figures he drew. His diagnosis of the situation, he said, ‘We are paying the price of the failure of previous governments’, was accurate. It is an opportunity to amend the demography.

“Al-Saqer is a public figure whether you agree or disagree with him. He comes from a sharp and distinguished family. He is a journalist and has the kind of political history that makes him one of the influential leaders with the necessary mix to change the scene. We congratulate him on achieving the presidency of the Kuwait Chamber of Commerce and Industry, and it makes us optimistic about his return.”

“At a time Minister of Health Dr Bassel Al-Sabah is preoccupied with the implementation of health precautionary measures such as isolating suspected cases in a bid to prevent the spread of COVID-19 in the country which could lead to the collapse of the local health system similar to several other countries, the government should not delay in addressing the repercussions of the deadly coronavirus outbreak,” columnist Waleed Al-Jassem wrote for Al-Rai daily.

“This does not necessarily mean compensating everyone with cash as some may understand, but it is necessary to lay down a new foundation of understanding that is binding to everyone. Things should not go out of hand for this pandemic to worsen in terms of its legal and financial repercussions on society, to a point where the country recovers from it but fails to go beyond its effects.

“Today, we are going through exceptional circumstances, hence, the need for extraordinary decisions. All parties should fully abide by these decisions, no one is exempted.

“If everyone (other than government employees) loses, then there is nothing wrong in laying the foundation for organizing relations between all of those who have lost. We should not let matters depend on personal effort or at the mercy of preference in terms of mitigating decisions aimed at reducing the impact in relation to the concerned parties.

“Nonetheless, we beg to ask: How will employers, whose businesses have been forcibly closed, settle the dues of their employees? How will the employers manage to pay the end of service dues, if a decision is made to terminate the contract with the employees? Are there decisions issued in this regard, especially on how manpower offices operate to protect the interests of the employers and the employees?

“The same applies to the landlords and tenants. Where are those who decided to waive portion of the rent, those who granted full discount and those who refused to make any concessions irrespective of the type of rentals – whether in the residential or commercial sectors?

“Also, personal loans and various kinds of obligations are greatly affected by the fluctuation of employee incomes – between complete or partial wage cut, between complete work loss and partial progressive loss, and between complete loss of benefits and partial loss.

“All of this should not be left as if nothing is happening. All of this should not be left to the usual law because it is no longer feasible. Here, applying the law in its entirety may lead to chaos in the relationship of the contracting parties, if such a relationship is not regulated.

“Historically, after the cloud of the Iraqi invasion cleared from Kuwait, there were many tangles and clear solutions tied to it with a clear time span and untying all knots between various parties. These outstanding matters were dealt with in a manner that allowed the country to return to normal.

“Now, Kuwait is not without a government as it was at that point. Crises should not be left to fester, there must be clear, binding and time-bound decisions to regulate relations as the outcome of this period. There should be compassion for all.

“Yes, the responsibility is great. Yes, the task is difficult, but procrastination or standing on the fence should not be tolerated. Rather, it is a matter of urgency which needs strict, practical and viable solutions. Will the government do that?”

— Compiled by Zaki Taleb