Kuwait freedoms make austerity drive tricky for government
* Kuwait slower than rest of Gulf to push austerity
* Three-day strike over pay hit oil output
* Thousands of workers unhappy with spending reforms
* Kuwait has history of labour disputes
* Rambunctious parliament must be handled carefully
By Sylvia Westall and Ahmed Hagagy
KUWAIT, May 2 (Reuters) - A three-day strike by oil workers in Kuwait last month over pay reforms shows the government faces considerable opposition as it prepares to push through painful and controversial cuts to longstanding welfare benefits.
Oil-exporting states around the Gulf are reducing subsidies for fuel, public utilities and food, and freezing or slowing the growth of public sector wages, as they try to curb big budget deficits caused by low oil prices.
Saudi Arabia, the United Arab Emirates, Qatar, Oman and Bahrain have all taken such steps in the past six months. But Kuwait has been slower to act; reforms were still being discussed in parliament last week and no timetable has been set.
In mid-March, Finance Minister Anas al-Saleh said the cabinet had approved in principle a "repricing" of some commodities and public services, but he gave no details and did not mention a date for the changes.
One reason for the delay is that Kuwait has more of a history of industrial action than the rest of the Gulf, where unions are banned or tightly controlled. In recent years, brief work stoppages over pay and conditions have also hit Kuwait's national airline and the customs administration.
More broadly, Kuwait's political environment is freer - in contrast to the other wealthy Gulf states, members of its rambunctious parliament routinely criticise government policy, and citizens are not shy about complaining on social media.
In 2012, thousands of Kuwaitis demonstrated repeatedly against a new electoral law which they said disadvantaged the opposition. Such protests are almost unheard of in the other Gulf states.
The result is that Kuwait's government is having a harder time imposing austerity policies than its counterparts, and the extent of those policies is still uncertain.
"The oil strike was a showdown between a welfare government and a civil society fearful that the government will solve its problem, resulting from a lack of planning, at its expense," said Shafeeq Ghabra, political science professor at Kuwait University.
"This strike shows that the government needs to have a major dialogue with civil society regarding economic as well political reform."
Billions of dollars are at stake; finance ministry undersecretary Khalifa Hamada told the al-Qabas newspaper at the end of last year that "rationalising" subsidies would save the government 2.6 billion dinars ($8.7 billion) over three years.