Ratings agency Fitch this year estimated KIA’s assets at $527 billion, equivalent to 380% of Kuwait’s GDP at the end of the financial year ending in March. By law, 10 per cent of Kuwait’s revenues is transferred annually into the Fund, which invests abroad. But influential voices are there to back the suspension of transfer of reserves to the Fnd this year and use the savings to help the economy. The KIA also manages the General Reserve Fund, which has been depleted at a fast rate to plug a budget deficit. Qatar Investment Authority View Total Assets Sovereign Wealth Fund Middle East 12. Both on your website and other media. Privacy Policy. He is not the only one voicing such an opinion. $1 = 0.3079 Kuwaiti dinars Reporting by Ahmed Hagagy, writing by Davide Barbuscia, editing by Nick Macfie. The fund is run by the Kuwait Investment Authority. Search for: totalkuwaitinfo@gmail.com Latest News. Kuwait Investment Authority: The Kuwait Investment Authority (KIA) is a government-owned corporation responsible for managing the sovereign wealth fund of Kuwait… Turkey Wealth Fund View Total Assets Sovereign Wealth Fund Middle East 13. All quotes delayed a minimum of 15 minutes. The fund is run by the Kuwait Investment Authority. Kuwait also has a comprehensive and highly developed subsidized national health-care system. While a withdrawal from the fund would require an enabling law, taking out a loan or investment from the Fund would not. Future Generations Fund: Kuwait In Debate For Future Without Oil by vegafbs: 10:35am On Jul 06 Kuwait still one of the world’s wealthiest countries, is in a budget crunch so severe that it may have to soon begin leaning on a fund intended to prepare it for a future without oil. While a withdrawal from the fund would require an enabling law, taking out a loan or investment from the Fund would not. The Future Generations Fund (FGF) was created in 1976 by transferring 50% from the general reserve fund at that time. This will save more than 1 billion dinars in the current fiscal year. But the estimated budget deficit due to the mounting cost of fighting the coronavirus is about 9.5 billion dinars ($30.9 billion), and the estimates have doubled with the decline in oil prices. In 1982, KIA was established to take over the responsibility of managing the assets of Kuwait from the Ministry of Finance. 25% of all state revenues are annually transferred to the fund. Government sources say the plan is to send a bill to parliament, with a plan to stop deducting the share of the Fund from budget. KUWAIT CITY, Dec 16: MP Safa Al-Hashem has rejected the possible conjecture put forth by Fitch Ratings recently about Kuwait having to dip into the future generations’ funds. “This option also guarantees the rights of future generations, and the Ministry of Finance can pay back deferred funds in the future,” he said. These cookies are used to improve your experience and provide more personalized service to you. It is addressing the budget deficit mistake with a greater one - by stopping transfers to the Fund.”. Established in 1976, the Future Generations Fund invests state revenue abroad. In 1976 the government established Kuwait’s Reserve Fund for Future Generations, and it has set aside 10 percent of the state’s revenues annually for it. Abu Dhabi: Kuwait is yet to see a consensus build up over whether it should be using its Future Generations Fund to tackle the economic fallout from the ongoing COVID-19 pandemic. The government will provide more than 1 billion dinars ($ 3.25 billion) in the current fiscal year alone. The government will provide more than 1 billion dinars ($3.25 billion) in the current fiscal year alone. Kuwait’s SWF witnesses steady growth despite crisis globally. Terms of Use KUWAIT, Aug 19 (KUNA) -- Kuwait's parliament approved a draft law amending a decree regarding the Future Generations reserve fund, which requires deducting a percentage proposed by the Finance Minister, and Cabinet approval in the event of an actual surplus in the outcome of the state final account. All rights reserved. © Al Nisr Publishing LLC 2020. Kuwait, one of the world’s wealthiest countries, is in a budget crunch so severe that it may have to soon begin leaning on a fund intended to prepare it for a future without oil. Another former minister, Bader Al Humaidi, said suspending the allocation to the Fund is “evidence of weak financial management”. WASHINGTON, DC – the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] with Kuwait and considered and supported the staff appraisal without a meeting. We’ll send you latest news updates through the day. According to a specialized economic report, despite the fact that Kuwait’s economic performance in 2020 would suffer from the double … Read More. In that month, the Norwegian Government Pension Fund was the largest sovereign wealth fund (SWF) globally, with managed assets amounting to almost 1.2 trillion U.S. dollars. You can manage them any time by clicking on the notification icon. Instead, it’s better to take a serious steps to redress the deficit and stop the financial waste. The government found it necessary, however, to tap into that fund during the Iraqi occupation. Kuwait was downgraded for the first time by Moody’s Investors Service, a decision the ratings agency said reflects the increase in the government’s “liquidity risks.” The special fund invests outside Kuwait, a major oil producer. Entrepreneurship. 10. Move to recover transferred KD 2.05 bln. 2012) Synopsis Fund Highlights • Kuwait’s Future Generations Fund was established as a long-term savings fund in 1976 by decree of the Deputy Emir. He said the government would submit legislation on that to parliament but did not specify when. WhatsApp - Advertisement - Kuwait still one of the world’s wealthiest countries, is in a budget crunch so severe that it may have to soon begin leaning on a fund intended to prepare it for a future without oil. Register to read and get full access to gulfnews.com, By clicking below to sign up, you're agreeing to our Al Arabiya English spoke to the SWFI – Sovereign Wealth Fund Institute, and has put together a list of the top 10 largest wealth funds in the Arab world based on overall fund size… A former finance minister, Bader Mishari Al Humaidhi, said the Fund was set up to be used in [future] critical times and not for the present. 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The FGF is a saving funds for future generations. KUWAIT CITY, Aug 23: Ministry of Finance is waiting for government’s approval of the new amendment to law governing the future generations fund, which is to be published in the Official Gazette, in order to recover KD 2.05 billion transferred recently to the fund, provided that the sum will be pumped into the public reserve fund, reports Al-Qabas daily. The FGF is savings fund for future generations where assets are invested outside of Kuwait. S&P Global Ratings in March cut Kuwait’s rating by one notch due to the economic and fiscal effects of lower oil prices. The bill was designed to … Twitter. “Transfers made sense in the light of past budget surpluses from investments and savings. The Future Generations Fund accounted for about $489 billion of KIA’s total assets, while the rest is in the General Reserve Fund, Fitch said. Kuwait’s Future Generations Fund $290 billion (est. But Al Humaidi warned the government is going for the easiest solution, which is stopping the transfer to the Fund. The Kuwait … December 2, 2020. Our Standards: The Thomson Reuters Trust Principles. Now, in the light of the low oil prices, revenues are not sufficient to continue with this move.”. Future Generations Fund (FGF), one of two funds managed by the KIA, which receives mandatory transfers of funds equivalent to 10 per cent of the government's revenue has continued to grow with solid profitability that has seen it rise to about 309 per cent of Kuwait's gross domestic product, Moody’s said in … Despite growing “liquidity risks,” Kuwait's government has not sought access to its sovereign wealth fund, one of the largest in the world, intended as fortune for future generations … This section is about Living in UAE and essential information you cannot live without. After a debut Eurobond issuance in 2017, Kuwait’s public-debt law lapsed, rendering the government unable to offer bonds. Investment Corporation of Dubai $301,527,000,000 Sovereign Wealth Fund Middle East 11. and The Future Generations Fund, which is managed by the Kuwait Investment Authority (KIA), automatically receives 10% of the state's oil revenue every year. As of July 2020. Ali Al Mousa, a former minister of planning, said that the state’s public finances are no longer healthy, given the persistent deficit. She said it is a weak assumption, as the funds is intended solely for the welfare of the coming generations, due to which any withdrawals from it is unacceptable. Facebook. Kuwait is locked in a heated debate over Future Generations Fund Cutting off 10% annual payment to Fund will not help Gulf state by much Published: July 06, 2020 11:27 Bloomberg Future Generations Fund . The Future Generations Fund, which is managed by the Kuwait Investment Authority (KIA), automatically receives 10% of the state’s oil revenue every year. Former ministers and officials have called for the setting up of an economic team to work out a proper austerity plan and arrive at ways to balance the budget. Therefore, a “decision to stop deducting the share of the Future Generations Fund is a natural measure,” Al Mousa said. Despite its vast financial wealth, the oil exporting nation could see its deficit widen to over 11% of gross domestic product (GDP) this year from a 4.8% surplus last year, the International Monetary Fund has estimated. Amounts an obligation of the General Reserve Fund, which has been unable to borrow a... Was created in 1976, the Fund would require an enabling law, 10 per cent of Kuwait an law. To improve your experience and provide more personalized service to you current and Future Generations are not sufficient to with. 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