Kuwait Appoints Al-Rushaid as Finance Minister in New Cabinet

(Bloomberg) -- Kuwait’s prime minister appointed his fourth cabinet in two years, naming a new finance minister and including four lawmakers in the lineup in an effort to break a political impasse that has held back economic reforms in the oil-rich Gulf nation.

Abdulwahab Al-Rushaid, a known critic of the government’s fiscal policies, becomes finance minister, replacing Khalifa Hamada, state media reported. Al-Rushaid was head of the Kuwait Economics Society, which represents the views of private sector business people.

Hamada, like his predecessors, had struggled to change Kuwait’s spending habits due in large part to a lack of support from senior policy circles. Political dysfunction has led to a revolving door at the critical ministry, with ministers rarely lasting long in office. Al-Rushaid is the sixth person to hold the portfolio in just under eight years.

Mohammed Al-Fares retained his position as oil minister in a cabinet that took five weeks to form. As Prime Minister Sheikh Sabah Al-Khaled Al-Sabah sought to appease all political groupings, many declined posts due to persistent parliamentary pressure on ministers and a lack of support for the changes required to help the government balance its books.

Other appointments include:

• Defense Minister and deputy PM: Sheikh Hamad Jaber Al-Ali Al-Sabah
• Interior Minister and deputy PM: Sheikh Ahmad Al-Mansour Al-Sabah
• Foreign Minister: Sheikh Ahmad Nasser Al-Mohammed Al-Sabah
• Health Minister: Khaled Al-Saeed
• Minister of state for municipality affairs and minister of communications: Rana Al-Fares

The OPEC member, home to about 8.5% of the world’s oil reserves, posted a record budget deficit in the last fiscal year due to a cash crisis exacerbated by a plunge in oil prices and the coronavirus pandemic. Years of political tensions have stymied efforts to diversify the oil-reliant economy and promote foreign investment, leaving Kuwait particularly vulnerable.

The previous cabinet resigned as the country’s ruler pardoned a number of opponents as part of a national dialog with members of the loosely aligned political opposition. Hopes have run high that some degree of reconciliation would help ease the passage of delayed laws, but it’s unclear how many hurdles have been removed.   

While appointing three ministers from among opposition lawmakers is symbolically significant -- the first time in 30 years the opposition has had such cabinet representation -- they are unlikely to have any real influence in making key decisions. They don’t hold key portfolios.

As finance minister, Al-Rushaid now heads the Kuwait Investment Authority, which manages the country’s $700 billion sovereign wealth fund, designed to reduce dependence on oil-related investments.

Efforts to strengthen the economy have been hindered by long running disputes between the country’s elected legislature, currently dominated by the opposition, and an executive appointed by the ruling family.

Kuwaiti Crown Prince Sheikh Mishaal Al-Ahmed Al-Jaber Al-Sabah in November temporarily took over some responsibilities of the country’s ruler, Emir Sheikh Nawaf Al-Ahmed Al-Jaber Al-Sabah, who has periodically traveled abroad on private trips that are widely known to have involved medical treatment. 

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