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Kuwait parliament’s (National Assembly) financial and economic affairs committee rejected an Amiri decree which included the government's rejection of the debt relief law that was passed by the parliament in January, the head of the committee said. MP Youssef Al-Zalzalah said that the decree will be sent to parliament, which has the power to override the government's rejection of laws with a two-thirds majority.

 

The controversial law, passed despite stiff government opposition, stipulates that the government purchase around KD 6.7 billion of bank loans of Kuwaiti citizens and then reschedule their repayment after scrapping the interest - estimated at between KD 1.5 and 1.8 billion. Under Kuwaiti law, the government has the right to reject laws passed by the Assembly and this has to be done in an Amiri decree within 30 days of passing the law.

 

The government has done so by rejecting the debt relief law and sending it back to the Assembly. To override the government rejection, the Assembly has two options - to have a fresh vote on the law in the current term and pass it a second time with a two-thirds majority. If supporters of the law cannot garner the backing of 44 MPs in the 65-member house, including Cabinet ministers who can vote, they can delay the voting until the next term starting in October and then vote on the law with a simple majority. If the law is passed in either case, it becomes mandatory and the government has no power to reject it a second time. Supporters of the law admit that they don't have the required two-thirds majority now, but they have the required numbers in the next term.

 

April 13, 2010

 

 

Analysis and Forecast: Increasing Risk

 

The parliament’s initial passing of the law was greeted with massive public support. The law will be very difficult to apply and critics, including the government, has warned it could be easily exploited.

 

The fact that it was rejected by the government puts it in direct opposition to parliament and public sentiment. MP’s will not want to be seen changing their position on this law as this will lose them massive public support. The government will do everything it can to stop its implementation. Although at this stage dissolving parliament is unlikely for this particular law, because a new parliament will likely have a similar position, the looming confrontation will add to the tensions between government and parliament and increases the chances of a parliamentary dissolution, and suspension of parliamentary life, for a year or two.