KUWAIT CITY, Jan 26: The Kuwaiti cabinet on Monday reviewed an economic rescue package aimed at protecting the emirate’s financial system from the fallout of the global economic downturn, an official statement said.

The plan was presented by governor of the central bank of Kuwait, who heads a task force set up to deal with the impact of the global financial crisis on the oil-rich Gulf state.

The plan “aims at safeguarding financial institutions and strengthening financial and economic stability in the country,” said the statement issued following the cabinet’s weekly meeting.

“The cabinet asked its legal and economic committees to jointly review the proposed package and then report back to the government with specific measures that need to be adopted,” the statement added.

It gave no timeline for completing the revision or presenting the proposals.

The stimulus package calls for speedy measures to rescue a number of troubled companies that have failed to repay their local and foreign debts.

Media reported the package includes new legislation that would allow public funds to be used to provide urgent loans to companies facing a cash flow crisis.

A number of Kuwaiti investment companies have defaulted on loans as credit facilities have become difficult to obtain and the value of their assets have dropped sharply.

Kuwait’s Emir Sheikh Sabah al-Ahmad al-Sabah has urged parliament to support a government economic stimulus package in the face of the global meltdown, newspapers reported Monday.

“We are keen for the package to pass (in parliament). I hope it will and I won’t be happy if it does not,” Al-Qabas daily quoted the emir as saying in a meeting Sunday with editors of local dailies.

The emir stressed that Kuwait is capable of passing through the global economic crisis as “our finances are in good shape and we are not in debt.”

He also said that public spending in the budget for the next fiscal year, starting on April 1, will be increased.

MPs are however divided on the issue, with some urging the government to take swift action to bail out troubled firms and restore confidence to the ailing bourse, while others insist any use of public funds should essentially help ordinary citizens and small investors.—AFP