Kuwait 'to name Crown Prince as premier'

Dubai-based Al Arabiya television, quoting unspecified sources, said elections would be held within two months.

"The semi-confirmed information we have received is that participants (at a meeting of ruling family members) agreed that Crown Prince Sheikh Nawaf should assume the post of prime minister," added the network's correspondent in Kuwait.

Al Jazeera television carried a similar report, saying the emir, Sheikh Sabah al-Ahmad al-Sabah, would issue a decree naming Sheikh Nawaf after discussing the appointment, in line with tradition, with current and former parliament speakers.

Private Kuwaiti television station Al Rai said in an unsourced alert the outgoing cabinet "had agreed on a decree to dissolve parliament and hold elections." It gave no details.

The crisis reflects an underlying conflict between the government and members of parliament who want to question the caretaker prime minister on his management of an economic crisis and alleged misuse of public funds.

Two members of parliament who declined to be named said the crown prince, who is the ruler's brother, was likely to become prime minister but final consultations within the ruling Sabah family were still to take place on Wednesday.

"Sheikh Nawaf has agreed but has not been appointed yet," one MP said.

"The Crown Prince has accepted. It's most likely he will be appointed but the dissolution (of parliament) has not been decided yet," another MP said, citing sources close to the ruling family.

Monica Malik, a regional economist at investment bank EFG-Hermes, said elections may not end the crisis.

"We do not believe the new make-up of parliament will be substantially different than the recent ones, that is dominated by  tribal alliances. This will result in continued opposition to the government reform programme," she said.

A diplomat said appointing the crown prince had been under discussion within the ruling family since Monday, when Kuwait's ruler accepted the resignation of the cabinet led by his nephew, Sheikh Nasser al-Mohammad al-Sabah. Sheikh Nasser's last cabinet resigned in November after a similar row.

The aim of the move would be to end a long-running dispute which has delayed economic reforms, including a $5 billion stimulus plan to deal with the global crisis. The plan includes bank guarantees that would help the battered financial sector.

There was no immediate official confirmation of the reports.

Kuwaiti shares rose 1 per cent on Wednesday on hopes that the assembly might be dissolved and the political crisis come to an end.

Kuwaiti members of parliament have a history of challenging the government. They have opposed many government plans to open up the economy and scale back a welfare state seen as an obstacle to expanding the private sector.

The caretaker government could issue the stimulus package without parliament and some analysts say the next assembly would then approve it since implementation would have started.

Others say parliamentary approval should not be taken for granted, given the tense political climate that has repeatedly led to the resignations of ministers or governments.

No major industrial project has been implemented in Kuwait for more than a decade and the cabinet cancelled a $17 billion joint-venture with Dow Chemical in December after some MPs opposed the deal, less than a month after signing it. 

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