Emir dissolves parliament
The tiny gulf state of Kuwait is a major oil producer, and its citizens are used to enjoying very low gas prices. However, as the United States has ramped up its oil production, global prices have gone down, and Kuwait has been forced to cut subsidies for its citizens, a move that has angered many Kuwaitis.
That decision has set off a series of moves, resulting in a decision by the Emir, or King, of Kuwait to dissolve the parliament, marking the seventh time in ten years that the parliament, known to be one of the strongest in the Arab world, has been disbanded.
“Low oil prices are causing serious economic problems to most of the countries in the Middle East,” William Blythe, an associate fellow at Chatham House, told The Media Line. “The drop is (also) causing significant social problems in these countries because, basically, they are running on the expectation of higher (oil) prices, which has caused a budget shortfall at the national level.”
Kuwait, a country on the Persian Gulf known to have the world’s sixth largest oil reserves, has a population of some four million. The small gulf state is one of the wealthiest members of OPEC, producing around three million barrels of crude oil a day which it exports to china, Japan, India, and Vietnam. Similar to other oil-producing Middle Eastern countries like Saudi Arabia, Kuwait subsidizes its domestic oil market for its citizens.
However, the country has faced mounting economic pressures as oil prices have dropped and as investments in the oil sector continue to decline, resulting in the governmental decision to increase the price of subsidized oil by some 83% in August. The government is raising prices within the country as global prices are decreasing so as to be able to fund other projects like education, healthcare, and infrastructure, Kuwaiti financial undersecretary Khalifa Hamada claimed.
This decision has proved to be unpopular amongst not only Kuwaiti citizens, but their parliamentary counterparts as well, who, despite being considered as government supporters, had filed three separate requests to grill government ministers on the subsidy cuts.
In response to these requests and in an effort to maintain his stronghold over the country, the Emir, also known as the King, Sheikh Sabah IV Ahmad Al-Jaber Al Sabah, exercised one of his rights by dissolving the parliament this month. While the decree cites regional circumstances and security challenges, some analysts are saying that one of the reasons the King decided to dissolve the parliament was to block parliamentary members from moving forward with questioning, while also creating a favorable political environment to pursue the royal agenda. The country has two months to elect a replacement parliament.
According to Meena Marafi, executive director for the Petroleum Research Center at the Kuwait Institute for Scientific Research, Kuwait, which, in the past, could sell a barrel of oil for roughly $125 USD, began to see the price of crude oil drop.
“At the beginning of 2015, the price of oil started to decline and then we got to a situation where it was about $20 per barrel,” Marafi said. “Then it was about $50 per barrel just after the meeting with OPEC in Algeria, and now it is about $40 or $42.”
According to the Kuwait Oil Minister, it seems that the cost of oil will teeter somewhere between $50 and $60 USD for the next year or so.
While some analysts argue that the Emir dissolved the parliament in an effort to maintain power, others point to the rise in attacks, especially by the Islamic State, as the reason behind the dissolution. For example, last year there was a suicide bombing, which left 27 dead, and in October an Egyptian truck driver associated with the Islamic State was carrying explosives when he crashed into a car carrying US soldiers. Only the Egyptian was killed.
Kuwait’s decision to dissolve its parliament has come directly after members of OPEC agreed, at their meeting in Algeria in late September 2016, to slash oil production for the first time in eight years. While the organization has come to this agreement, they have yet to agree to a specific number, which is what will, hopefully, be decided at the next meeting.
Katie Beiter is a student journalist with The Media Line