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Islamists to control Kuwait assembly
By Ulf Laessing
Published in The Saudi Gazette on 06 - 05 - 2009

ISLAMISTS and tribesmen are likely to maintain their grip on Kuwait's parliament at an election this month, putting at risk plans to attract more investment by opposing cuts to a huge welfare state amid a financial turmoil.
The Gulf Arab state's ruler, Emir Sheikh Sabah Al-Ahmad Al-Sabah, called elections for May 16, the second in a year, to end a protracted conflict between the 50-seat assembly and the cabinet that has hindered legislation for three years.
But analysts and investors see no end to a pattern of political crises in the OPEC member which has seen three elections and five cabinets in three years with a long backlog of bills.
With a financial crisis gnawing at the only Gulf Arab state yet to be forced to rescue one of its major banks, Islamists are set to benefit from campaigns opposing public sector cuts and the sale of state firms – steps viewed as major reforms.
“I don't think that the political situation will improve after the vote,” said Birgit Ebner, who manages a Middle Eastern share fund at Germany's Frankfurt-Trust, one of the few international investors on the Kuwait bourse.
“There seem to be more or less always the same people in parliament. I'm not convinced to give the new assembly the benefit of the doubt,” she added.
Monica Malik, regional economist at EFG-Hermes in Dubai, agreed: “The last two parliaments show that Kuwaiti voters made similar voting decisions.”
In the last assembly, Sunni Islamists held some 26 of the 50 seats, Shi'ite representatives had five, while there were also some seven liberals. The rest were roughly independent or tribal politicians, many of them team up with Islamists.
With two of five electorate districts located in tribal areas, 20 of the 50 seats seem safe for tribesmen or Islamists who are on the rise: Every second voter symphathises with Islamists, according to a poll published by Al-Watan last week.
Few deals
Kuwait, a conservative Sunni-led nation, of which a third of its citizens are Shi'ites, has had few sectarian tensions.
Several Islamists have assumed top state functions such as Commerce & Industry Minister Ahmad Baqer, a member of the Salafist movement – an appointment that has, like others, not changed the overall direction of the ministry much. Political analyst Shafiq Al-Ghabra said Islamists were not trying to alter the system, which allows more freedom than other Gulf states, but wanted to influence school curricula, the role of women and to defend subsidies for citizens.
“The Islamists are most organized...They're trying to champion themselves helping the lower and middle classes,” said Ghabra, a professor for political science at Kuwait University.
Together with tribesmen, Islamists have been the driving force in a parliament that has to approve all bills, the budget, and can stop deals, unusual in a region ruled by families.
With a ban on parties there is no united front but several Islamists, tribalists and even liberals have scuppered deals with foreign firms – most prominently a $17 billion project with Dow Chemical , just a month after Kuwait signed it.
“The Dow Chemical case has had an impact on how Kuwait is viewed as an investment destination. The political risk for investors is higher than in other Gulf states,” said Malik.
Analysts say Kuwait, which sits on a tenth of global crude reserves, needs to diversify its economy to prepare for the post-oil era. But the energy sector still accounts for more than 40 percent of the GDP, compared to 3 percent in Dubai.
Despite being home to the Arab world's second-largest bourse, Kuwait has seen few foreign investors as plans for a regulator to end insider trading fell prey to the standoff.
“We're underweight with Kuwaiti stocks due to transparency issues, problems of the financial sector and a political standstill,” said Ebner who prefers investing in Qatar and Egypt.
A country manager of a Western firm is more blunt after a deal failed: “It's very difficult. Not much gets signed or if it was, it may get cancelled or delayed. Not even urgent projects get done because the ministries are scared of parliament.”
Diplomats said a recently planned business delegation visit had been cancelled due to a lack of interest of firms.
More trouble might be on the horizon as many candidates join Islamist demands to buy up loans of citizens, in contradiction to government efforts to end a nanny state.
“I think the financial crisis and its influences on society have made this call even stronger,” said Abd Al-Rahman Alyan, Editor In Chief of the Kuwait Times.
Risk consultants Political Capital warn the next assembly would probably clash with the cabinet like the last which triggered cabinet resignations by filing questioning requests.
“Who is responsible for the issues we're facing? The government of course, they're the decision-makers,” Saleh Ashur, an Islamist Shi'ite candidate told a rally.


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