Revitalize ‘Social Security’

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Ahmed Al-Jarallah
Editor-in-Chief, the Arab Times

■ Involve the institution in building labor cities, increase its income and solve the labor housing crisis
■ Urgent need for improvement of legislation to keep pace with the leadership’s aspirations for development and reform
■ Decision circles are firm in protecting the institution and the pension of retirees, similar to what other countries have done
■ Transferring ownership of lots worth KD2.5 billion to the ‘Social Security’ is part of the process of reviving the institution
■ The institution suffers from an actuarial deficit that cannot be covered due to the nontransfer of KD24 billion from the State
■ Higher orders to support the institution by freeing State land for investment and enhancing revenues
■ The experience of Lebanese banks confiscating ‘pension’ funds is a lesson that cannot be overlooked and must be learned
■ Investing ‘pension’ funds in infrastructure projects and constructions with a safer societal return
■ The major crises the world went through proved that investing wealth at home is much better than abroad
■ Soon … Developing legislation and easing restrictions that shackle the national economy and impede its growth
■ Decision circles aim to protect the institution and prevent it from falling again into the arena of corruption or the hands of the corrupt

KUWAIT CITY, Aug 23: On the course of development and reform, the political leadership has begun implementing the ambitious plan to improve the investment climate, especially at the local level. The first glimmer of hope appeared in the announcement of Deputy Prime Minister, Minister of State for Economic Affairs and Investment and Minister of Finance Dr Saad Al-Barrak regarding the transfer of the ownership of three plots worth KD2.5 billion to the Public Institution for Social Security (PIFSS). This is in compliance with the directive of the political leadership to invest these plots to support the retirees. It is a step within the process of reviving PIFSS and enhancing its income to ensure more stability for retirees and the localization of the institution’s investments. In this context, sources close to the higher decision-making circles said: “The institution is suffering from actuarial deficit that the State cannot cover due to the failure to transfer the money owed to it by the State, estimated at KD24 billion.

Sources revealed this contributed to limiting the ability of PIFSS to play its role in meeting the needs expected from it, especially the demands of citizens. Sources confirmed that higher orders were issued to support the institution by releasing a significant chunk of State land to invest in them and increase revenues. Sources added: “This approach is based on proposals and studies presented by Kuwaiti, Gulf and foreign experts and consultants who were hired by the State,” pointing out that “similar institutions in other countries invest their money in their countries. Such efforts paid paid off as they became more secure at a time the experience of Lebanese banks confiscating pensions is a lesson that cannot be overlooked.”

The sources emphasized that “when these funds are invested in infrastructure and community- based constructions at the local level, such as entertainment venues and shopping malls; the institution will undoubtedly guarantee its funds at home” The sources also pointed out that other Arab Gulf countries operate by this principle – whether Bahrain, the United Arab Emirates, Qatar, the Kingdom of Saudi Arabia or the Sultanate of Oman, where the ‘Social Security’ companies invest a large part of their money in their countries and in western countries, where they contribute to technology companies and other investments with high returns and minimal risks like real estate and infrastructure projects.” Sources stated: “In some countries, these institutions establish housing cities and execute urban projects, and then rent them out or sell a part of them or some of their shares. PIFSS can contribute to labor cities or own them, and then lease them to companies. In this way, the institution’s revenues will rise and it will solve a major problem that the country suffers from – a major social crisis due to the spread of laborers in residential areas and related crimes.

Sources added: “When the institution, and even other local entities, invest their money in the country, they add value to financial security as they move the wheel of the national economy. Therefore, they do not incur construction costs in the commercial markets that are being built by PIFSS and other State institutions, especially since the released pieces of land are in commercial areas and are considered the best in the country.”

Sources confirmed that “this will be followed by other steps, because the directives of the higher decision-making circles are clear to everyone in terms of moving Kuwait forward, specifically in local investments and strengthening the national economy. The major crises the world went through proved that investing money locally is much better than investing it abroad.” They stressed that the next stage will witness the development of legislative work to keep pace with the aspirations of the higher decision-making circles, along with easing of restrictions which prevent the revitalization of national economy.

They disclosed: “The higher decision-making circles endeavor to protect the institution; so it neither falls into the arena of corruption or the hands of the corrupt once again, nor slip into high-risk investments and smuggling of money abroad.” They reaffirmed that the decision-makers are firm in protecting the institution and the money of retirees, similar to what other countries have done. “With this step, they opened the doors of PIFSS to investment in infrastructure, electricity, water, technology and local profitable projects that “resume the recovery of the institution and its national role, as well as protect the funds of retirees in terms of local development.”

By Ahmed Al-Jarallah
Editor-in-Chief, the Arab Times

This news has been read 3512 times!

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