The Kuwait government has already backed down to avert a strike by port workers over a freeze on future pay rises, scheduled for 21 November. Port staff and union representatives called off their one-day strike after the government offered fresh talks over public-sector pay.

Industrial action has been threatened in several sectors since Kuwait's Emir Sheikh Sabah al-Ahmad al-Sabah ordered a review of pay rises. This is not due to report until February 2008, prompting the cabinet to impose a pay freeze until then.

Trade unions claim the government has repeatedly back-tracked on promises to improve public sector pay.

However, it remains unclear what concessions the government is preparing to make. Speaking to MEED, a Justice Ministry official says there is no guarantee forthcoming negotiations will resolve the deadlock. “We have stopped the strike,” he says. “Now we will hold talks and see what we can do for these people in February.”

The government is balancing a need to stabilise public spending and maintain Kuwait's competitiveness in the region.

“Inflation keeps driving up prices and the government is trying to balance the public finances, but it has been too slow to take action,” says a senior union official.

“The government here tends to take things to the limit, which is why these strikes are being threatened, but Dubai has just announced a pay rise for public sector workers, and if Kuwait wants to stay competitive it must follow.”

However, some claim that a three-month discussion with no guaranteed resolution could leave some businesses wrecked by February.

Hamad al-Marri, chairman of the union for employees at Kuwait Airways (KAC), says the loss-making national airline cannot afford to delay an overhaul of its wage structure any longer.

“Staff at other airlines around the region receive up to 50 per cent more in basic salary than our members,” he says. “So those other airlines are taking our expert staff. Engineers, pilots and mechanics are leaving Kuwait to earn more elsewhere.”

“We are only asking for a 35 per cent pay rise, which will not put us on an equal level even then, but would give us a better chance of keeping our best staff.

“The government needs to accept its responsibility and back down from its position. If we do not act now, we will face a bigger problem in time. In three months, we could find the airline has no pilots and no engineers. If this happens, there will be no airline.”

The KAC union has so far indicated it will not organise walkouts at the airline, preferring to stay in talks. However, this is dependent on swift movement from the government.