| Rescue package designed to help top firms, claim experts |
KUWAIT CITY, Feb 14: Several economic experts have opined that the proposed economic rescue package will not solve the problems of cash-strapped companies, contrary to the belief of some groups, reports Annahar daily. Pointing out that the proposed package was designed to provide assistance to companies with a good financial position, the experts argued this move will harm several companies, which are currently under tremendous pressure due to lack of liquidity and non-settlement of financial obligations. The experts warned the big investment companies will be compelled to declare bankruptcy if the government will not provide them with the necessary financial support.
Urging the concerned authorities to speed up the approval of the proposed package, the experts stressed “Time is not on our side. We should expedite procedures for the implementation of the proposal before the situation gets worse as any delay might lead to higher costs and more dangerous repercussions.” The experts also recommended linking approval of the proposal with other demands to avoid the recurrence of the economic crisis in the future, which might destroy both the weak and strong companies.
Cost-effective
Meanwhile, Rapporteur of the Finance and Economic Affairs Committee in the Parliament MP Ahmed Lari said the proposed economic rescue package is cost-effective, adding there is no need to link the bill with the loans issue, reports Awan daily. Stressing the need to hold a special parliamentary session to discuss the economic rescue plan of the government, Lari called for holding the session by the end of next week but he was quick to add that the final decision lies in the hands of the National Assembly. He also affirmed that the proposed package is aimed at lessening the impact of the global financial meltdown on the local economy. He added the proposal is not an open financial support system but it ensures assistance to all sectors.
Lari revealed the bill stipulates granting financial support to cash-strapped companies provided they will not use the money to pay their loans. He said the committee will continue discussions on the bill with any MPs willing to study the proposal. In the meantime, State Minister for Housing and Administrative Development Affairs Dr Mudhi Al-Humoud has forwarded the modified development program for fiscal 2009/2010 and 2011/2012 to the Cabinet, reports Al-Qabas. Sources said the proposed total cost to reduce the budget from 2009 to 2012 was KD 3.855 billion, indicating the current cost is KD 21.689 billion while the previous amounted to KD 24,775,431,000. Sources added the total cost of the program before the reduction was KD 6,601,818,000 for 2009/2010 and KD 5,965,974,000 after the reduction.
Sources affirmed the Secretariat-General of the Planning and Development Council has presented a proposal to Al-Humoud not to reduce the budget for construction projects for 2009/2010, which started prior to the implementation of the proposed budget reduction. Sources said the budget for 2010 will be reduced by 30 percent but the budget for vital projects aimed at serving a large number of citizens. Sources confirmed there were also reductions in the budgets for the projects of the Interior, Health and Education ministries — considered as three of the largest ministries in terms of expenditures.
Sources stated the Interior Ministry has been asked to deduct KD 438,311,000 from its previous budget for the implementation of 75 projects while its education counterpart was asked to deduct KD 243,214,000 and KD 95,589,000 for the Health Ministry. Sources added the ministry has 64 projects and 19 of which were for health centers while others are for financing the private health sector. - Arab Times
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| Posted on:
15/02/2009 |
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