World Bulletin / News Desk

Kuwait's finance minister resigned on Thursday after opposition lawmakers accused him in parliament of failing to deal with alleged financial irregularities in his departments.

Mustapha al-Shamali, who served as finance minister from 2007 and has worked in the ministry for more than four decades, denied allegations of mismanagement on his watch.

The 69-year-old's resignation marked fresh political discord between the government and parliament, which was only elected three months ago. He is likely to be replaced by an interim finance minister until a more permanent solution is found.

Political upheaval is not new to the major oil producer, which ushered in its fourth parliament in six years after a snap election in February. Opposition candidates, mainly Islamists, won a majority of seats in that ballot, which was triggered by another political row between the government and parliament.

The infighting has held up decisions on large investment projects in the OPEC member state and put off foreign investors, analysts and bankers say.

Shamali denied any wrongdoing and accused lawmakers of self-interested political gain.

The questioning session in parliament "deviated from serving the public interest and is for revenge and settling scores with the finance minister and some of his aides", he said, according to state news agency KUNA.

Opposition MPs had threatened Shamali with a vote of no confidence after the questioning session, which lasted several hours. He chose to resign in front of parliament instead.

The alternative could have been for the whole government to resign, leading to the dissolution of parliament and another snap election.

Boycott

On Wednesday, the whole cabinet boycotted a parliamentary session it had been asked to attend after a row over plans to question Shamali, raising the possibility of a full political crisis.

The lawmakers' eight-point motion against Shamali cited "violations on the part of Kuwait Investment Authority," the country's sovereign wealth fund, and irregularities related to the Customs Department, the Al-Zour Plant company, wages, and other issues.

While Kuwait has one of the most open systems of government in the Gulf region, political parties are banned and opposition politicians instead form blocs in parliament.

They put pressure on the government through the "grillings", which ministers must comply with. A similar process targeting the former prime minister led to the resignation of the previous government.

The new finance minister will be faced with the difficult task of trying to help manage the Gulf state's economy in the face of rising wage demands from labour unions.

Kuwait airline workers and customs employees held strikes this year over pay, grounding planes and delaying port traffic.

Policymakers, including Shamali, have voiced concerns about Kuwait's dependency on oil revenues and the global fallout of the euro zone crisis, but political gridlock has meant Kuwait has struggled to diversify its economy.

The International Monetary Fund said in a report this month that Kuwait will have exhausted all its oil savings by 2017 if it keeps on spending money at the current rate.