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IN the coming four years until 2026, additional revenues can be expected, in accordance with the forecast of the International Monetary Fund (IMF) and in anticipation of higher oil prices, which will generate additional monies. This means the Gulf oil producing countries’ sovereign wealth fund must be prepared for global investments. Its appetite must be enhanced for more diversifications and acquisitions at various levels, at a time when other non-oil companies are facing cost increases due to higher energy prices and inflation.
With the ongoing Russian invasion and the pause in the threat on energy supply to Europe, Gulf oil remains a vital source of oil and gas. Europe is trying to sort out its difficulties by diversifying and knocking on the door of Iran with USA’s approval. This is a long shot but will not ease energy supply. However, it means that the four Gulf states – Saudi Arabia, the Emirates, Qatar, and Kuwait – will be generating more energy incomes, provided of course there is some sort of discipline and control on the annual budget and expenses.
The Gulf funds are now trying to move away from the mechanism of traditional investments and opting for more sophisticated ones, including clean energy, healthcare, technology, and life science.
Also, the new industries are diversified, but some also joined to play some part in the sports sector such as buying football clubs. On the other hand, Kuwait’s sovereign wealth fund stayed far away from sports and all of its kinds, and for some good reasons, perhaps to avoid some angry shouts and noises from fans in case of lost games or relegation.
In the meantime, we should not ignore the need to review and follow the international oil companies in slowly moving away from fossil fuels. Their path should be followed, hand in hand, so as not to lose sight, thereby contributing to easing global warming. Again, this should be considered as another added revenue to other wealth investments.
The additional $ 1.3 trillion coming to our Gulf countries in the next four years should not distract us from closely monitoring our expenses and avoiding giving away money in any form or benefits, and try hard not to be carried away with wasteful expenses.
Our focus in Kuwait should be directed towards improving and investing in better and improved education, health care, better roads, and overall infrastructure, in the hope of bringing the old Kuwait back and making it “The Pearl of the Gulf” again.
Kuwait is not short of almost anything. We should be setting an example for our neighbors like we used to.
By Kamel Al-Harami
Independent Oil Analyst