Economists say early retirement bill will have negative consequences

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Economists say early retirement bill will have negative consequences

Posted on : Monday 16th of April 2018

KUWAIT CITY : A number of economists revealed their objection to the implementation of the early retirement bill in terms of its high cost and negative consequences, reports Aljarida daily.

Executive Chairman of National Bank of Kuwait Essam Saqr highlighted the dangerous consequences of the early retirement bill including loss of an important part of productive and experienced manpower. He said the bill will allow the termination of services of capable and experienced employees while they are in their best phase of service, and their replacement with new employees who need a lot of training and qualification.

This in turn will delay the development plans. Saqr recommended studying the experiences of advanced countries in this regard, indicating that it is common for an employee to be referred for retirement at the age of 65. He said the age to refer employees for retirement differs based on the nature of each institution due to which the issue needs to be studied well before a decision is taken.

Meanwhile, a member of Kuwait Chamber of Commerce and Industry (KCCI) Abdulwahab Al-Wazzan insisted that referring employees for early retirement in order to create new job opportunities is not an ideal option to tackle the issue of unemployment. He stressed that solving a problem should not happen by creating a bigger problem, highlighting the increased financial burdens the Public Institution for Social Security have to bear. Al-Wazzan indicated that the state will bear about KD 2 billion in addition to 20 percent of the social insurance for each employee who either works in the public sector or private sector.

Affirmed

Also, economic expert and Board Chairman of Arzan Company Jassem Zain Al-Ali affirmed that early retirement will bring about huge financial burdens on the public budget at a time when the educational outputs do not match the demands of the labor market, as well as the spread of random employment. He lamented that the state committed to employ the citizens when it instead should have encouraged the private sector and improved the economic environment in order to create real job opportunities.

In addition, economic expert and former head of Kuwait Banks Association Abdulmajid Al-Shatti described the early retirement bill as a catastrophe. He highlighted many negative consequences represented in psychological and family problems resulting from the lack of ability of the retirees to meet their daily expenses as well as loss of a number of experienced employees.

Al-Shatti indicated that the enforcement of this bill will increase the rate of loans procured by people because the early retirees will not be able to cover the expenses of their family members.

Furthermore, Minister of Finance Nayef Al-Hajraf revealed that 344 employees of Public Institution for Social Security resigned during the period from January 2015 to December 2017 mainly because of low salary scale, reports Al-Shahed daily.

In response to a parliamentary question, Al-Hajraf said the institution had requested for a review of the salary scale of its employees in a manner that corresponds with its activities but nothing so far has been done in this regard. The minister indicated that the institution is currently preparing a new proposal to amend the salary scales of its employees, revealing that the number of non-Kuwaitis working in the institution is 134, which represents seven percent of the total number of employees.

Courtesy : Arab Times

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