“People don’t like the true and simple; they like fairy tales and humbug,” French writer Edmond de Goncourt (1822-1896).
By Yousef Awadh Al-Azmi
The contents of some news bear more comedy than seriousness. One of the most notable suppositions is that the financial status of any country is considered a State secret. In other words, any detail that a country gives about its financial status is untrue.
It is naïve to assume that a country will announce its actual financial status. In fact, any information on the financial status of a country is usually politically, security or socially minted. This means the published information is meant to achieve a certain objective — a local and global notion.
Did you know that even the actual stock of wheat in any country is one of the secrets which should not be subjected to speculation, let alone published? Hence, I laugh a lot whenever this or that country publishes a report on its financial status as 99 percent of which is misleading. I am not making this up.
Recently, local newspapers published a report on the performance of Kuwait Investment Authority (KIA). The report said KIA incurred huge losses in its ventures and it is no longer part of the top 10 best performing sovereign fund index in the world.
It does not need a genius to figure out that KIA is not there to compete with any other sovereign funds the way countries compete in the World Cup. Whether Kuwait’s sovereign fund is on the top 10 list or not is not the desired objective of its operations. We are not ignoring the fact that even the top 10 list might not be true due to reasons I presented earlier.
It is common knowledge that majority of sovereign fund investments are long-term strategic investments. It is a fact that from time to time, these types of investment go through ups and downs. This is normal considering the ever changing circumstances related to such investments.
Therefore, it is immature and illogical to gauge the performance of the sovereign fund based on short-term hiccups or through an unqualified technical mechanism, because such investments are usually costly but with low risks.
Such investments are usually in the form of real estates, shares in giant firms and other similar investment domains which, most of the time, avoid high risks or speculations.
By now, it is clear that information concerning the perceived underperformance of KIA in terms of the sovereign fund is inaccurate based on the reasons mentioned in this article.
In fact, I believe that as it has always done, KIA’s performance is up to the desired level as manifested in various experiences — the most important of which is the Iraqi invasion of Kuwait, let alone the quality of its assets and competence of its management.