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KUWAIT CITY, Feb 23: National Assembly Speaker Marzouq Al- Ghanim said he received the interim government’s bill on amending Future Generations Fund Law No.106/1976 on Feb 17, and that he forwarded it to the Financial and Economic Affairs Committee the following day.
He revealed the bill allows the government to withdraw KD5 billion maximum from the fund every year in order to address the budget deficit. He thinks the Assembly will not approve the bill for various reasons, pointing out the present generation does not own the fund. He said: “The future generation consists of our children; so we must work in their interest, not ours.”
He argued that withdrawing from the fund is not the best option as the cost of liquidating the assets of the fund valued at KD5 billion is estimated at KD300 million, while the cost of obtaining the same amount of loan from the international market is about $75 million. He added the fund’s investments generate revenues ranging from six to 10 percent per year, so what is the benefit of liquidating the assets of such high yielding fund instead of obtaining a loan with about one percent interest? He clarified that borrowing per se is not wrong as other countries are doing the same; but the problem lies in how the loan is spent.
He said if the loan will be used for investment, it is a correct move; but if it will be used for covering running expenditures, it is just like a temporary painkiller. He asserted the interim government is repeating its mistake; as it previously submitted a bill on borrowing KD20 billion without explaining reasons behind such move to the citizens, so the bill was rejected.
On the same issue, MP Badr Al-Dahoum urged Kuwait Economic Society (KESOC), as well as the economic experts and academicians at Kuwait University, to conduct a study aimed at finding plausible solutions to the economic problems of the country. He promised to support such studies until the Assembly approves them.
He explained that he took this step after realizing the government lacks the ability to address the economic problems, denouncing the latter’s plan to withdraw KD5 billion from the fund. He added a government that failed to manage the State during the surplus period when the price of oil reached $120 per barrel will not be able to find solutions in difficult times – when oil price is very low. He added: “Since HH the Prime Minister Sheikh Sabah Al-Khalid is not competent enough, let him go to leave a space for someone who is capable.”
In addition, MP Muhammad Al- Mutair said he has no intention to approve such a bill; pointing out that he might consider it if the withdrawal will be done once, if it is considered a loan with clear payment terms and if the government submits a clear plan for dealing with the economic issue.
By Saeed Mahmoud Saleh Arab Times Staff