Monday, March 1, 2021

Turki Al-Hamad describes democracy in Kuwait as false and says, “We are indispensable to it.” A nation is tweeting out of tune

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In a surprising move, the Emir of Kuwait, Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, issued an Emiri decree to postpone the holding of the Kuwaiti National Assembly meetings for a month.

Article 106 of the Kuwaiti Constitution

And the implementation of the decision, according to the decree, starts today, Thursday, and is based on Article 106 of the Constitution. According to the Kuwait News Agency, without providing further details.

Article texts

According to the Kuwaiti constitution, Article 106 states that “The Emir may, by decree, postpone the National Assembly meeting for a period not exceeding a month.

According to the constitution, postponement is not repeated in a single session except with the approval of the parliament and for one period. The postponement period is not calculated within the term of the session.

A confrontation between the National Assembly and the government

This came in the wake of a confrontation between Parliament and the government that led to the government’s resignation last January.

This was after the majority of parliament members supported a proposal to question the Prime Minister Sheikh Sabah Al-Khaled Al-Sabah.

On January 24, the Emir of Kuwait re-assigned Sheikh Sabah Al-Khaled Al-Sabah to form the government.

In the meantime, Turki Al-Hamad, the Saudi academic close to the royal court, intervened in the Kuwaiti affairs, expressing his mockery of the climate of democracy in the country, unlike what is happening in Saudi Arabia and the Emirates.

Turki Al-Hamad said in a tweet monitored by “Watan”: “Democracy is a burden, not an achievement in some circumstances.”

Turki Al-Hamad added, “Frankly, and without the frustration of our Prime Time Zone in Kuwait, a democracy of the Kuwaiti style, we are indispensable to it.”

He continued, “Saudi Arabia, the UAE and Oman are making achievements without a false democracy.”

The Saudi writer Turki Al-Hamad continued by saying: “Sometimes, and in certain historical circumstances, democracy is a burden, not an achievement,” as he put it.

The tweet sparked a lot of criticism from the Kuwaitis, who considered it a blatant interference by Turki Al-Hamad in the internal affairs of their country.

Another crisis in Kuwait

Earlier, the Kuwaiti Minister of Finance, Khalifa Musaed Hamadeh, stated that the financial liquidity in the Kuwaiti treasury is close to running out. At the same time, he affirmed that his country has a solid financial position, he said.

This came during a statement issued by the Kuwaiti minister, to comment on the decision of the “Fitch” credit rating agency, earlier today, Wednesday. Which reduced its outlook for Kuwait’s debt to “negative.”

Hamada explained during the statement that “Kuwait’s financial position is strong and solid; For being fully supported by the Future Generations Reserve Fund, which is witnessing continuous growth. ”

The Kuwaiti minister added that “the state’s public finances suffer from structural imbalances related to annual revenues and expenditures. As a result, the treasury was running out of cash.

He pointed out that enhancing liquidity in the treasury is one of the most important priorities of the Kuwaiti government in the coming stage. He stressed the concerted efforts of all parties, and work as one team to achieve public financial sustainability.

Fitch

It is noteworthy that earlier, Wednesday, Fitch announced the downgrade of its outlook for Kuwaiti sovereign debt. To “negative” from “stable”, while maintaining the country’s rating at “AA”.

Fitch added in a statement that the revision of the forecast reflected the associated near-term liquidity risk. With imminent depletion of liquid assets in the General Reserve Fund.

And in the absence of any parliamentary mandate for the government to borrow.

Fitch also expected the general government deficit to widen to 6.7 billion dinars (22 billion dollars), or 20% of the gross domestic product. In the fiscal year 2020-2021, which ends on March 31.

Kuwait is experiencing one of the largest economic crises, due to the effects of the Corona virus, and because of low oil prices. Which is the main source of more than 90 percent of government revenues.

Generations Reserve Fund

The Kuwaiti newspaper “Al-Qabas” revealed that the Kuwaiti Generations Reserve Fund was able to achieve good returns during the past year. As a result of the record highs of global stock markets.

The newspaper pointed out that the generational reserve assets cover the deficit for a period of more than 13 years.

And according to what the local Al-Qabas newspaper reported, on Saturday evening, government sources – unnamed – confirmed that the Generations Reserve Fund. Make good returns over the past year; As a result of the record highs of global stock markets.

The sources refused to disclose the confidential data and results of the fund, noting that the total investments of the generations reserve are in stocks. An estimated 87 billion dinars ($ 287 billion).

Generations reserve

The government’s official announcement of the general reserve fund’s liquidity running out, heralding a shift towards generational reserves to fill a deficit The budget And provide liquidity.

According to the announced estimated deficit figures, the generational reserve assets cover the deficit of 12.1 billion dinars (39.9 billion dollars). In the fiscal year 2022-2021 for a period of 13 years, and about 11 years for the 2021-2020 deficit of 14 billion dinars (46 billion dollars).

The fund achieved a significant increase in investment returns for the year 2020, as a result of record profits in global stock markets.

However, the path of continued growth in assets through the transfer of 10 percent of oil revenues has stalled, while transfers have begun. Liquidity to general reserve a while ago.

And that is through an exchange of assets with the Al-Ajyal Fund to cover expenses and salaries, and also in light of the possibility of transferring fixed assets. As large as the Petroleum Corporation, or the trend towards direct borrowing from the fund.

In a statement last Monday, Kuwaiti Finance Minister Khalifa Hamadeh said that the size of the assets of the Future Generations Fund is in a state of continuous growth. However, the General Reserve Fund suffers from fundamental liquidity challenges.

After submitting the budget for the new fiscal year, the minister added: “The executive authority is committed to implementing its development projects and stimulating economic growth.”

Kuwait, which is facing a difficult economic crisis, is striving to find solutions to boost its budget, which has been badly affected by the Coronavirus pandemic and low oil prices.

This is rapidly draining the General Reserve Fund, which it relies on to finance its budget.

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Turki Al-Hamad describes democracy in Kuwait as false and says, "We are indispensable to it."  A nation is tweeting out of tune