Parliament, public against welfare cuts - Freedoms make austerity campaign tricky for govt - Kuwait Times | Kuwait Times
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Billions of dollars are at stake; finance ministry undersecretary Khalifa Hamada told the al-Qabas newspaper at the end of last year that “rationalizing” subsidies would save the government KD 2.6 billion ($8.7 billion) over three years. Savings would be greater if the bloated public payroll could be reformed. The finance ministry projected in January that the government would run a budget deficit of KD 12.2 billion in the fiscal year starting on April 1, 2016, after state contributions to the sovereign wealth fund.
Between 7,000 and 13,000 of around 18,000 Kuwaiti nationals in the oil sector took part in the strike in late April, union members estimated. Union membership is not compulsory and foreign workers are not permitted to strike. Workers were protesting a proposed overhaul of the public sector payroll system that would set uniform standards for salaries, bonuses and benefits. The Oil and Petrochemical Industries Workers Confederation fears the government will use the reform to freeze salaries of higher-paid employees.
Ultimately, the union called off the strike “in honor of His Highness the Amir”, and the government insisted it made no concessions – an apparent victory for authorities. But the union has been talking to the government since the strike ended, so concessions could still be made. Kuwait’s oil output fell as low as 1.1 million barrels per day during the strike from the usual output of around 3 million bpd, tarnishing the country’s image as a reliable exporter.
“The workers have achieved their main objective of getting their message across,” said Faisal Abu Sulaib, another political science professor at Kuwait University. Saif al-Qahtani, chairman of the oil workers’ union, said he could not speak for other unions but that some of them also opposed wage system reform. Some other union members and analysts said a string of strikes in Kuwait remained unlikely. An official at the headquarters of the Kuwait Trade Union Federation, which represents 15 unions in the energy and government sectors, said it had not been informed of any other planned walkouts.
Nevertheless, in the wake of the oil strike, the government may move even more gradually and cautiously with reforms. While most of the current parliament has been relatively supportive of the idea of reform, legislative elections are due next year, and the government will not want the issue of austerity to cause the election of a more antagonistic parliament.