Kuwait govt asks parliament to approve debt Law

The Kuwaiti government and parliament have long been at odds over the law which would allow Kuwait to tap international debt, but the issue has gained urgency in recent months as the oil-exporting nation has been hit by low crude prices and the COVID-19 pandemic.

Kuwait's government formally submitted a public debt law to parliament on Sunday which would allow it to borrow 20 billion dinars ($65 billion) over 30 years, including 8 billion dinars to help finance the current budget deficit, a legislator said.

Safaa al-Hashem, head of parliament's financial and economic committee, announced details of the request while reiterating criticism of the government for not outlining investment plans and failing to diversify state revenues away from oil.

"The country is drowning in economic problems that need to be addressed," she said in parliament after a meeting with officials from the finance ministry and Kuwait Investment Authority (KIA), which manages two sovereign wealth funds.

To plug the deficit, Kuwait has been drawing down its General Reserve Fund which the IMF estimates could reach more than 11% of GDP this year, compared with a 4.8% surplus last year.

Reuters could not reach the government immediately for comment. It has previously said Kuwait has plans for economic reform and diversification, but that lawmakers often block them, particularly if they are unpopular.