KUWAIT Kuwait's ruler dissolved parliament and set an election for May 17 on Wednesday after a political crisis that delayed economic reforms forced the oil exporting state's government to resign.
"We were hoping that our brothers in the two authorities, legislative and executive ... would achieve the aspiration of our people ... and we were patient for a long time," Sheikh Sabah al-Ahmad al-Sabah said in a speech.
Sheikh Sabah, who has the final say in the mainly Sunni Muslim country's politics, said repeated calls for cooperation between lawmakers and the government were not heeded.
"To protect our homeland and citizens from irresponsible conduct that has crossed boundaries and did not take into consideration past experiences ... and to safeguard national unity I have decided to dissolve parliament," said Sheikh Sabah.
The crisis was caused by a standoff between the cabinet and parliament, which has a history of challenging the government -- unusual for a region where countries like Saudi Arabia are dominated by ruling families.
Kuwait, whose stock market rallied on investor hopes the reforms would be approved by a new assembly, wants to diversify its economy away from oil like Gulf Arab neighbors Dubai and Bahrain that have become regional financial centers.
The official news agency said polls will be held on May 17.
The dissolution followed the resignation of the cabinet on Monday, less than a year after it was sworn in, complaining of a lack of cooperation from the assembly. Sheikh Sabah did not say if he had also accepted the resignation of the cabinet.
Traditionally a new government is appointed after elections.
The standoff had paralyzed political life and delayed key economic reforms in the OPEC producer and key U.S. ally, where one of every three nationals is Shi'ite.
The bourse rallied to an all-time high on Wednesday. The benchmark rose 1.5 percent to 14,450.40 points.
Sheikh Sabah told Kuwaitis that their loyalty should be only to God and the homeland rather than any "sect, tribe or group".
Several Shi'ite politicians including two members of the dissolved house took part last month in a ceremony commemorating a slain leader of Hezbollah, a Shi'ite Lebanese guerrilla group, raising sectarian tensions in the country.
This is the fifth dissolution of the former British protectorate's parliament since the house was set up in 1963.
The emir cut short a holiday to Morocco and returned late on Tuesday to deal with the crisis, holding urgent talks with the parliament's speaker, the crown prince and the prime minister.
"This is a wrong decision," Mohammad al-Saqr, the head of parliament's foreign affairs committee, told Al Jazeera.
Parliament had made progress approving long-awaited reforms such as a reduction in taxes on foreign firms and privatization of the loss-making national airline.
But tensions flared again on Sunday when lawmakers demanded a new raise for public sector employees who comprise over 90 percent of working Kuwaitis.
The demands put parliament on a collision course with the cabinet which raised salaries in February to offset the effect of spiraling inflation.
A bill to set up a financial regulator and open up the stock market to more foreign investment has been stalled in the house.
Deputies have also forced the cabinet to set up a fund to buy back bad debts Kuwaiti nationals incurred from shopping sprees, in a blow to plans to reduce dependence on the state.
Kuwait has yet to name an oil minister to replace Badr al-Humaidhi, who resigned days after his appointment in November under pressure from hostile deputies. The previous cabinet had resigned to avert a parliamentary no-confidence vote in the then health minister, a member of the ruling family.
Parliament members have to approve the state budget and all laws and exercise their right to question ministers. It passed a law in 2005 giving women the right to vote and run in elections.
(Writing by Lin Noueihed and Inal Ersan)