There could be more clampdowns to come. 'The government is serious in combating corruption, and is dedicated to transparency and punishing violators,' warned Deputy Prime Minister Ismail al-Shatti on 11 December. Corruption in Kuwait is no more prevalent than anywhere else in the Gulf in its most recent report, Paris-based Transparency International rated Kuwait 45th in its annual corruption perceptions list better than Saudi Arabia, Morocco and Egypt, but behind the UAE, Bahrain and Tunisia. The difference with Kuwait is that here the topic is discussed quite openly. Indeed, it is probably the most frequent subject of debate in the state's relatively open political arena, with members of parliament (MPs), ministers and newspapers often making vague accusations against unnamed public officials, ministries or local firms. Until recently, however, these accusations never went much beyond talk. A succession of weak governments and a lack of concerted political will ensured that corruption continued to creep across all areas of public life. 'We get ministry officials coming up to us all the time asking us for something,' says a Kuwait-based international consultant, echoing a common sentiment. 'We turn them away we have to. If I get caught I can go to prison back home.' The advent of an opposition-controlled National Assembly (parliament) and the determination of Sheikh Nasser al-Ahmed al-Sabah's new government seem to be changing all that. Following a recent SAB report, which set out allegations of malpractice in the state's many build-operate-transfer (BOT) contracts, the government in October set up three committees to investigate the claims. Even before the committees concluded their findings, the government began to act. In the state's Official Gazette on 10 December, the Commerce & Industry Ministry formally confirmed the cancellation of four BOT contracts held by the local National Real Estate Company (NREC) and Agility, formerly known as PWC Logistics, covering the operation and management of Shuwaikh and Mina Abdullah port free zones. The contracts, let between 1998 and 2004 by the Public Authority for Industry (PAI), allegedly contained many irregularities. Immediately following the release of the Official Gazette, PAI officials came in to take control of the free zones. In response, Agility and NREC filed an injunction to prevent immediate takeover of their assets, as well as a lawsuit claiming damages for lost revenue. 'We think this decision is disgraceful and lacks any justification,' said NREC chairman Jamil Sultan al-Essa on 11 December. 'We have fallen victim to the politicisation of the issue. We will definitely go through the proper channels to ensure that the cancellation process was legal, transparent and credible. The judicial authority should decide this.' Unsurprisingly, stocks in the two companies on the Kuwait Stock Exchange (KSE), already battered by a clampdown on the breaking of disclosure rules by the influential Al-Kharafi family, went into freefall. Both stocks registered drops of more than 10 per cent before recovering slightly. There have been several critics of the government's approach, with MPs arguing that its actions were inconsistent with the SAB's recommendations. Why, asked some, were NREC's and Agility's contracts cancelled when others were not?

Best practice

Whatever the outcome of the NREC and Agility contract disputes, however, the affair has shown the government is finally beginning to take corrupt practices seriously. While no further contract cancellations are expected, many existing contracts could be altered, which could make them less lucrative for the companies involved.

There have been political casualties too. After the government abandoned its support for him, beleaguered Information Minister Mohammed al-Sanoussi stepped down on 18 December, just hours before he was due to be grilled by MPs over allegations about his company's role in BOT contracts before he came to office. Observers are now waiting to see whether the government has the appetite to continue with its anti-corruption probe. The indications are that it will, at least for the time being. On 16 December, the KSE barred shareholders with stocks in 13 listed companies from selling their shares for breaking disclosure rules. The same day, the influential parliamentary financial and economic affairs committee approved a new monopoly law to clamp down on price fixing in the local market. It remains to be seen how much appetite the government has for wholesale reform, but few will deny that something has to be done. 'The issue of graft has become much more prevalent than just a few years ago,' says one local contractor. 'The problem is that there is so much money in the system that people think they can get away with so much more.'