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Friday , February 3 2023

Future Fund up, Finance tells panel

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Finance Minister Nayef Al-Hajraf

KUWAIT CITY, June 4: Finance Minister Nayef Al-Hajraf has said that the performance of Kuwait’s Future Generations Fund (FGF) is “very good and there is no decline in its assets.” On the contrary, the value of the FGF assets is continuously growing, Al-Hajraf told a meeting of the government with a joint parliamentary committee, according to a statement issued by the Finance Ministry.

The meeting which tackled means of enhancing state’s general reserves, brought together the ministers with the parliamentary committees on budget and final accounts, financial and economic affairs, and legislative legal affairs, and the government.

Reviewing the outlook of monetary assets or their equivalent in the General Reserve Fund (GRF) for the next five years, the minister said: “They are not positive despite the recovery of oil prices over the last period”. The liquidity of the GRF will not improve even if the rise in oil prices continues, he noted. The data and figures circulated by the press on a decline of the assets of the FGF are mere “external and false estimates by uninformed agencies,” he stressed. Al-Hajraf affirmed that maintaining liquidity of the GRF is the responsibility of the executive and legislative powers, although the former bears the largest part in this regard. He pointed out that the legislative power is able to strengthen the GRF through enacting necessary legislations.

The approximate assets of the GRF until the end of the FY 2017-2018 hit KD 26.4 billion ($87 billon), monetary assets, or their equivalent, and the liquid investments, KD 13.2 billion ($43.5 billion) each. During the meeting, the minister reviewed several scenarios of oil prices from $70 to $100 per a barrel, and the potential impact on GRF liquidity. He referred to “the inevitability of depletion of liquidity of the GRF in all scenarios,” with the variability of the period of exhaustion according to the annual rate of oil prices.

In remarks to reporters on the sidelines of the meeting, Al- Hajraf said that they aimed to clarify real challenges facing Kuwait in terms of preserving general reserves. “We have affirmed that the performance of the FGF is based on a very solid ground, but the performance of the GRF, especially liquidity, is decreasing very significantly and required to be strengthened and addressed,” he said. A presentation to the cabinet meeting last week, the minister focused on the problems facing the GRF, and the proposed solutions to strengthen the reserves.

The state’s financial status would be revealed at the end of this legislative term, he said. The meeting was attended by Deputy Prime Minister and Defense Minister Sheikh Nasser Sabah Al-Ahmad Al-Sabah, Deputy Prime Minister and Minister of State for Cabinet Affairs Anas Al-Saleh, Minister of Social Affairs and Labor and Minister State for Economic Affairs Hind Al- Sabeeh, Minister of State for National Assembly Affairs Adel Al-Kherafiand CEO of the KIA Farouk Bastaki.

The GRF assets and the income are available for use by the state as determined by the government through passing an annual budget by Parliament.

The GRF is one of two funds managed by Kuwait Investment Authority (KIA) and is considered the public treasury. It is the major account that receives all the state’s oil revenues and income.

The FGF, Kuwait’s Sovereign Fund, is the platform portfolio that receives 10 percent of the state’s total revenues annually for investment. According to law, FGF are not disclosed. Meanwhile, if the government rejects the newly ratified Early Retirement Law, it will be tabled for discussion and passed once again in the next legislative term considering the National Assembly holds the majority, says MP Abdullah Fahaad. Fahaad made the statement after parliamentary sources hinted that the government is leaning towards rejecting the law.

He pointed out that although both authorities reached an agreement while drafting the bill, the ministers voted against the bill in its first and second readings. The MPs wondered why the government rejected the bill even if the country will not incur any cost.

Nonetheless, the bill was passed, he added. He explained the law merely supports replacement of senior employees with new blood and it is not even mandatory. He said governmental employees, who intend to retire before completing 30 years in service and have completed 25 years, are given the option to retire with lesser pension. He pointed out more than 17,000 unemployed Kuwaiti youths will find jobs in the government sector once this law is implemented, stressing the importance of implementing the replacement policy.

Furthermore, almost every expressway and ring road in the country is undergoing or has undergone development. According to information disclosed by the Public Authority for Roads and Transportation (PART), an agreement to carry out a study and lay down the preliminary plan for the development of Fahaheel Expressway (30th) is underway.

In view of this information, MP Khaled Al-Otaibi urged the authority to divulge more details such as the project’s timeline, alternative routes during development, and cost of developing the country’s transportation system in the past four years. Talking about the ongoing projects, Director General of PART Ahmed Al- Hesaan stated that 58 percent of the Fifth Ring Road development project has been completed. With a total cost of KD 108.8 million, the project is under strict supervision.

Inspections are conducted daily and reports are submitted regularly in order to ensure completion by the end of 2019 as per the agreement with the contractors, he added. On the other hand, Head of Nuwaiseeb Expressway project (southbound 40th towards the chalet area) Yahya Al-Ali believes this project will be completed in the first quarter of 2020. He said 7.5 percent of the project has been completed, indicating the total cost is KD 169.5 million. He revealed the development plan consists of several bridge U-turns and four crossing bridges for camels and herders. He said the expressway will still have six lanes but there will be one extra lane on each side for future use, while some roadside services and stops that hinder the project will be relocated.

By Ahmed Al Naqeeb Arab Times Staff and Agencies

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