(Updates with rally late yesterday in 10th paragraph.)
Oct. 6 (Bloomberg) -- Meshal al-Zaidi says he was drawn into Kuwait’s protest movement by political ideals, not the economic grievances that helped spur revolts in poorer Arab countries.
“My friend drives a Porsche Cayenne, another a Porsche Panamera, you’ll see the best cars at Kuwaiti protests,” said al-Zaidi, a 25-year-old who runs a public relations firm and attends rallies seeking the ouster of Prime Minister Sheikh Nasser al-Mohammed al-Sabah. “It’s not about money, it’s not about oil, it’s about real democracy.”
Demands for a change of government are growing louder in Kuwait, where per-capita gross domestic product was about $39,000 last year and the authorities started food and cash handouts in February as Egyptian protesters were driving Hosni Mubarak from office. That’s a warning signal for other Gulf rulers who are also betting on accelerated spending to appease calls for democracy spreading through the Arab world.
Kuwait has gone further down the road toward representative government than peers in the six-member Gulf Cooperation Council, while posting slower economic growth. Its $110 billion development plan is lagging as opposition lawmakers, with more powers to block policy than direct it, charge the government with corruption. The main stock index has fallen 15 percent in the past year, double the drop on Bloomberg’s Persian Gulf benchmark.
‘Less Politically Stable’
“The next several months or couple of years in all the Gulf monarchies are going to be less politically stable than at any other point in their history,” said Christopher Davidson, who specializes in the study of the Persian Gulf at Durham University in the U.K. In Kuwait’s case, “parliamentary activity is far more advanced than the others, and its ability to hold up economic development is unprecedented in the Gulf.”
Kuwait created the Gulf’s first elected parliament half a century ago, and expanded the franchise to include women in 2005. It ranked as the third most democratic Arab state, behind Lebanon and Iraq and above the other five GCC countries, in the Economist Intelligence Unit’s 2010 Democracy Index.
Economic growth, though, has been the GCC’s slowest over the past five years, according to International Monetary Fund data. Gross domestic product expanded an average of 2.6 percent a year, compared with 4.2 percent in the United Arab Emirates, 5.7 percent in Bahrain and 18 percent in Qatar.
Kuwait’s assembly has no say in the formation of the Cabinet, traditionally headed by a senior member of the ruling Al-Sabah family. It can demand the right to question ministers, and lawmakers are using that power to harry Sheikh Nasser, the ruling emir’s nephew.
Demonstrations calling for the premier to quit began in March, and the biggest on Sept. 21 drew several thousand in a country where Kuwaitis make up only one-third of the 3.6 million population. Opposition lawmakers such as Musallam al-Barrak and Jamaan al-Harbash regularly speak at the rallies. Youth groups including al-Zaidi’s ‘September 16’ cite inspiration from the Arab Spring and demand a constitutional monarchy and elected government.
“The continuation of Sheikh Nasser’s government is an insult to the Kuwaiti people,” al-Harbash told a crowd of thousands at a meeting in front of parliament in Kuwait City late yesterday. The protesters, mostly wearing traditional Arab robes, formed a circle around a central platform where fans were placed to cool them down.
Sheikh Nasser has survived three confidence votes in parliament since his appointment in 2006 and been forced to form seven separate administrations.
‘Matter of Dignity’
The opposition is threatening a renewed drive to unseat Sheikh Nasser after the assembly reconvenes on Oct. 25, this time over a corruption scandal that was a trigger for last month’s protest.
Eleven lawmakers received unexplained payments of 31 million dinars ($112 million) to their bank accounts, al-Barrak said in an Oct. 4 phone interview. Al-Barrak said the country’s two biggest banks, National Bank of Kuwait and Kuwait Finance House, revealed the transfers, and there may be other “suspicious accounts” still to be disclosed. National Bank and Kuwait Finance declined to comment.
Sheikh Nasser “will be toppled” if the issue comes to a parliament vote, al-Barrak said. “This is a matter of dignity for the Kuwaiti nation.”
The government has drafted an anti-corruption bill that it says will be submitted to parliament this week. The measure will “ help put an end to this controversial file and to the accusations” of graft, Oil Minister Mohammad al-Busairy said this week.
Gulf Spending Spree
Political ructions are holding back Kuwait’s investment plans. The Al-Zour refinery, a $14 billion project with planned capacity of 615,000 barrels a day, was due to be operating next year. Construction hasn’t started and Kuwait National Petroleum Co. said last month it’s still awaiting final approval.
Governments across the Persian Gulf are opening purse- strings in response to public demands for higher living standards spurred by the revolts in Tunisia and Egypt. Among the six GCC countries only Bahrain, where 35 people were killed as security forces cracked down on protesters, and Oman experienced violence.
Saudi Arabia announced $130 billion of spending on jobs and homes, in addition to an existing five-year, $380 billion investment plan. The U.A.E. is spending $1.6 billion to improve infrastructure in its poorer northern regions. Kuwait’s version is a four-year program costing 30.8 billion dinars which started last year.
‘Change Is Coming’
There’s no shortage of funds. Kuwait has the world’s sixth- biggest oil reserves and pumped about 2.6 million barrels a day last month, Bloomberg data show. It has posted budget surpluses for 12 straight fiscal years, amassing 38 billion dinars in the past seven. The government in February granted Kuwaitis 1,000 dinars each, along with 13 months of free food staples.
The problem is a lack of government leadership that is hurting the economy’s ability to compete internationally, said Jassim al-Saadoun, head of Kuwait-based Al-Shall Economic Consultants.
“We have enough funds to finance our own projects, but to produce what?” he said. “Things are intolerable, change is coming.”
Adding to the turmoil is a wave of strikes, as Kuwaitis in the private sector demand equality with government employees, while the latter call for salary increases to match peers in other departments. A threatened strike in the oil industry, averted when employees’ demands were met, would have cost the country $320 million a day, Oil Minister Mohammad al-Busairy said last month.
Al-Zaidi, the publicist turned activist, says it’s the corruption allegations that are fueling the most anger.
“Once upon a time we said, okay, let them steal and let them build our country,” he said. “Now we say, we’re not going to let them steal and we are going to build our country.”
And he is working to spread the message: “I tweeted my friend and asked him not to wear his Prada shoes to protest, but to wear something practical.”
--With assistance from Dahlia Kholaif in Kuwait and Ilan Kolet in Ottawa. Editors: Ben Holland, Steve Bryant.
To contact the reporters on this story: Fiona MacDonald in Kuwait at email@example.com;
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