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Gulf peers, but the emirate is still on track to post the largest
surplus in the region, Bank of America Merrill Lynch said on Monday.
"The lack of political determination for ( economic) diversification
has caused Kuwait to lag behind most of its GCC (Gulf Cooperation
Council) neighbours," the bank said in its quarterly report on the
region. "The volatile political cycle and populist policies have also
been a drag," it said. But the report also said that limited
investment and spending commitments mean Kuwait will continue to post
the largest GCC surplus, estimating this at around 12 billion
dollars. Kuwait, the first state in the Arab Gulf to embrace
democracy in 1962 , has been marred by political turmoil over the
past four years because of disputes between the elected parliament
and the government. Prime Minister Sheikh Nasser Mohammad al- Ahmad
al-Sabah, a senior member of the ruling al-Sabah family, has been
forced to form six cabinets since he was appointed to the post in
February 2006. Parliament has also been dissolved three times since
May 2006 and three general elections have been held over the same
period. However, relations between MPs and the government have failed
to improve and remain tense. Monday's report cited the striking
difference between the Kuwait Stock Exchange and other GCC bourses,
saying Kuwait "remained miles behind the rest of the region despite
the country's strong macroeconomic balances."
