Kuwait dissolves parliament, votes on May 17

Kuwait's ruler said on Wednesday he decided to dissolve the parliament of the U.S.-allied Gulf oil exporter citing "irresponsible conduct".

Sheikh Sabah al-Ahmad al-Sabah said in a televised speech a new parliament would be elected, and the official Kuwait News Agency said the polls will be held on May 17 citing a decree.

Kuwait's crisis was caused by a standoff between the cabinet and parliament, which has a history of challenging the government.

The decision followed the resignation of the cabinet on Monday, less than a year after it was sworn in, complaining of a lack of cooperation from the assembly.

The standoff had paralyzed political life and delayed key economic reforms in the major OPEC producer and key U.S. ally.

The cabinet resignation left Sheikh Sabah with two options under the constitution: to order the formation of a new cabinet or to dissolve parliament and call new polls within two months.

This is the fifth time the parliament has been dissolved in the former British protectorate since the house was set up in 1963. Sheikh Sabah's predecessors suspended the assembly for six years in 1986 and five years in 1976.

The emir cut short a holiday to Morocco and returned late on Tuesday to deal with the crisis, holding urgent consultations with Kharafi, Crown Prince Sheikh Nawaf al-Sabah and Prime Minister Sheikh Nasser al-Mohammad al-Sabah.

Political deadlock

Parliament had made progress approving long-awaited reforms such as a reduction in taxes on foreign firms and privatization of the loss-making national airline.

But tensions flared again on Sunday when lawmakers demanded another pay rise for public sector employees who comprise more than 90 percent of working Kuwaitis. The demands put parliament on a collision course with the government which had raised state salaries in February to counter high inflation.

Musallam al-Barrak of the Popular Bloc said the last straw for the government was the salary raise, but like many deputies, he blamed a lack of cooperation on the part of the government.

Kuwait wants to diversify the economy away from oil to emulate the success of Gulf neighbors Dubai or Bahrain which have become regional financial centers. But a bill to set up a financial regulator and open up the stock market to more foreign investment has been stalled in parliament.

Instead, deputies forced the cabinet to set up a fund to buy back bad debts Kuwaiti nationals incurred from shopping sprees, in a blow to plans to end reliance on a nanny state.

Speaker Jassem al-Kharafi delayed until April 1 a parliament session that was meant to take place on Tuesday.