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‘Social Security’ plots a historic turning point
■ Transferring the ownership of three plots to the Public Institution for Social Security (PIFSS) is a huge and exceptional step towards developing the mechanism adopted by the institution
■ Investment in local assets is a strategy adopted by pension funds in America, Australia and most Gulf countries
■ Investments of PIFSS include the establishment of residential, industrial and craft cities in order to diversify the sources of income
■ It is necessary to boost the national economy through creative initiatives
■ Social security institutions in all countries manage real industries and they do not put their money in dubious deposits
KUWAIT CITY, Aug 27: As the saying goes: “It is better late than never,” a decision has been taken to transfer the ownership of three plots to the Public Institution for Social Security (PIFSS) to invest in them in a bid to ensure PIFSS’ sustainability and improve the conditions of retirees. The decision is an extraordinary leap aimed at upgrading the mechanism that PIFSS has adopted since its establishment. Economists and business experts consider the decision a remarkable turning point in the history of one of the deepest rooted institutions in the country. They expressed optimism over the intention of PIFSS to have long-term investments on the plots under the monitoring of the institution and its subsidiaries.
They affirmed that PIFSS will establish economic and entertainment facilities, which will contribute to the transformation of the country into a tourist destination in the interest of citizens to boost the economy, and to give more benefits to the retirees and their families. Reliable sources disclosed that the decision is a turning point in the course and mechanism for managing Kuwaiti investments. They confirmed that other steps steps will follow, such as granting more plots to PIFSS and paving the way for more local investments in different fields like housing, real estate, entertainment, tourism, construction, sale and rental of shops and craft areas to Kuwaiti youths and investors keen on establishing businesses in Kuwait. They believe this is one way of generating job opportunities and contribute to boosting the economy, which has many shortcomings.
Sources stressed the need for the country to activate different types of industries; including primary, manufacturing and mass industries. They said PIFSS is suffering from a huge actuarial deficit, because of the weaknesses of previous governments including the failure to pay debts to PIFSS that needs to increase its contribution to local investment. Sources added PIFSS must follow in the footsteps of its counterparts in other countries where the pension funds are invested in low risk and more sustainable enterprises, which allow the investment of revenues in new assets.
They added that social security institutions in other countries invest in major enterprises related to infrastructure, water and power plants, and roads. Sources stated this is the approach adopted by pension funds in the US, Australia, European countries, Oman, Bahrain, Saudi Arabia and United Arab Emirates. They added the investments should include the establishment of residential, industrial and craft areas; because Kuwait is in dire need of advanced industrial infrastructure in order to diversify sources of national income and limit reliance on oil revenues.
They underscored the need to boost national economy through certain initiatives; away from corruption, quota and favoritism which increased the deficit in all public institutions, not just PIFSS. Sources pointed out that social security institutions in other countries have their own markets, skyscrapers and real industries.
Sources said these institutions do not put their money in foreign stock markets and dubious deposits like the case of Lebanon. They disclosed that the total value of vacant spaces in Kuwait is estimated at KD 150 billion, but they are not invested. They explained that the actual value of plots lies in the value of established buildings; so the investment in this field improves the gross domestic product (GDP), which Kuwait needs urgently.
By Ahmed Al-Jarallah
Editor-in-Chief, the Arab Times
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