UPDATE 3-Kuwait forms new Cabinet, includes six royals

Sun Aug 4, 2013 9:36am EDT

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ABU DHABI Aug 4 (Reuters) - A veteran former central bank governor was appointed Kuwait's finance minister on Sunday, state news agency KUNA said, after a parliamentary election in the major crude producer last month.

A reshuffled cabinet unveiled by the news agency also included a new oil minister, Mustapha al-Shamali, who was finance minister in the outgoing cabinet.

Oil policy in the OPEC member state is set by a Supreme Oil Council, so ministerial changes in that portfoilio are less important than in other countries.

The finance ministry will now be headed by Sheikh Salem Abdulaziz al-Sabah. Early last year Sheikh Salem resigned as central bank governor after 25 years in the post, complaining about a rapid rise in government spending. This suggests he could be something of a budget hawk in his new post.

However, with Kuwait still posting large budget surpluses, he is not expected to cut overall spending back, merely slow its growth moderately. In any case the new parliament, seen as willing to cooperate with the cabinet, is expected to give increased priority to long-delayed development projects to spur the economy.

The oil position was previously held on an acting basis by al-Shamali, after his predecessor, Hani Hussein, resigned in May under pressure from parliament.

The new cabinet was sworn in on Sunday before the emir, Sheikh Sabah al-Ahmad al-Jaber al-Sabah, KUNA reported. It includes six members of the royal family and one member of parliament.

Previous governments included on average four members of ruling al-Sabah family and up to six members of parliament.

Mohamed Khaled al-Hamad al-Sabah will serve as interior minister, a decree by the emir said.

The July 27 parliamentary election brought in an assembly seen as more amenable to the government than some of its predecessors, raising hopes that economic development projects will move forward in the Gulf Arab state.

Kuwait's ruler reappointed Sheikh Jaber al-Mubarak al-Sabah as prime minister after the election and asked him to form a new Cabinet.

Kuwait has the most open political system in the Gulf Arab region, but parliaments have been repeatedly dissolved over procedural disputes or for challenging the government.

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