Kuwait City skyline. Kuwaiti lawmakers have proposed the state to guarantee to pay rents of six months and 80 per cent of salaries of small and medium enterprises. Image Credit: Gulf News archive

Abu Dhabi: A Kuwaiti parliamentary panel has submitted a motion to the Cabinet to open up the largest number of businesses with firm health controls, offering non-refundable grants of no more than 10,000 dinars ($32,500) for each small and medium enterprise (SME), Kuwaiti media reported.

The lawmakers also proposed the state guarantee to pay rents of six months and 80 per cent of salaries as of July 1.

They also proposed to facilitate banking procedures and extend payment periods, covering all projects, including non-performing ones, and motivating large companies through certain facilities in exchange for using the services of small and medium companies.

The Parliamentary Committee on business environment improvement has received a preliminary approval from chairman of the Higher Committee for Economic Stimulation Dr. Mohamed Al Hashil of the contents of their working paper to support private sector projects during the COVID-19 crisis, Al Qabas reported.

Sources told Al Qabas the committee discussed with Al Hashil the working paper, which was prepared by MP Ahmed Al Fadl and a group of members of the parliament.

The sources said that Al Hashil expressed his initial approval to discuss the paper, and include it in his recommendations to the Cabinet.

The package includes bills concerning public debt and bankruptcy designed to help companies through the current economic turmoil and save the jobs of 73,000 Kuwaitis in the private sector.

Kuwait has passed a $5.2 bilion economic stimulus package after a dissolution of its fractious parliament allowed the government to implement the bill unopposed.

The stimulus package does not increase spending on infrastructure but offers bank guarantees on loans and allows the government to buy unsubscribed shares in banks’ capital raising.

Despite its vast oil reserves and $200bn sovereign wealth fund, Kuwait has been one of the Gulf countries most severely affected by the financial crisis.

A large number of Kuwaiti investment companies are struggling after highly leveraged bets on illiquid assets such as private equity vehicles and property.

Global Investment House, a large investment bank, has already defaulted on its debt, and Gulf Bank, one of the country’s largest lenders, had to be recapitalised by the government after it almost collapsed on a currency derivatives trade that went awry.