The official, confirming a report by local newspaper Al Qabas, said the government wants to make the 10% revenue transfer conditional on achieving a budget surplus. And to ensure the rights of current and future generations are not compromised. 25% of all state revenues are annually transferred to the fund. Instead, it’s better to take a serious steps to redress the deficit and stop the financial waste. December 2, 2020. The Future Generations Fund (FGF) was created in 1976 by transferring 50% from the general reserve fund at that time. Read more about Kuwait gets first Moody's downgrade over govt's 'liquidity risks' on Business Standard. “This option also guarantees the rights of future generations, and the Ministry of Finance can pay back deferred funds in the future,” he said. See here for a complete list of exchanges and delays. All quotes delayed a minimum of 15 minutes. 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. Turkey Wealth Fund View Total Assets Sovereign Wealth Fund Middle East 13. Future Generations Fund . Future Generations Fund: Kuwait in Debate for Future without Oil. Economic performance of Kuwait deteriorating since 2014. This section is about Living in UAE and essential information you cannot live without. Kuwait also has a comprehensive and highly developed subsidized national health-care system. Established in 1976, the Future Generations Fund invests state revenue abroad. 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. Now, in the light of the low oil prices, revenues are not sufficient to continue with this move.”. 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… 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. The special fund invests outside Kuwait, a major oil producer. and In 1976, Kuwait’s Crown Prince Jaber al-Ahmed al-Jaber al-Sabah who was the deputy emir of Kuwait issued a law creating the Future Generations Fund. The KIA may also manage any other funds entrusted to it … The Future Generations Fund, which is managed by the Kuwait Investment Authority (KIA), automatically receives 10% of the state’s oil revenue every year. Search for: totalkuwaitinfo@gmail.com Latest News. 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. Established in 1976, the Future Generations Fund invests state revenue abroad. Another former minister, Bader Al Humaidi, said suspending the allocation to the Fund is “evidence of weak financial management”. Move to recover transferred KD 2.05 bln. Facebook. The Kuwait Investment Authority (KIA) manages the assets of Kuwait’s Future Generations Fund (FGF). Kuwait reserves for future generations hit $598 billion Published October 27th, 2014 - 02:09 GMT The report said the reserves had increased by $15.7 billion in the first six months of the year. 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. Our Standards: The Thomson Reuters Trust Principles. [2] Nonoil growth strengthened to estimated 3 percent in 2019, propelled by government and consumer spending. Some in government reckon that not allocating to the Future Generations Fund this year will free up more cash to take care of the economy now. The KIA also manages the General Reserve Fund, which has been depleted at a fast rate to plug a budget deficit. He is not the only one voicing such an opinion. Kuwait Investment Authority: The Kuwait Investment Authority (KIA) is a government-owned corporation responsible for managing the sovereign wealth fund of Kuwait… The fund is run by the Kuwait Investment Authority. Kuwait cannot access international debt due to parliament opposition to a debt law proposed by the government. With oil output contracting by 1 percent, broadly in line with the … 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.”. The Kuwait Investment Authority’s mission is to achieve a long term investment return on the financial reserves entrusted by the State of Kuwait to the Kuwait Investment Authority, providing an alternative to oil reserves, which would enable Kuwait’s future generations … The bill was designed to … 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 KIA also manages the General Reserve Fund, which has been depleting at a fast rate to plug the budget deficit. 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. But Al Humaidi warned the government is going for the easiest solution, which is stopping the transfer to the Fund. After a debut Eurobond issuance in 2017, Kuwait’s public-debt law lapsed, rendering the government unable to offer bonds. The debt law that the government is trying to pass would allow it to raise its debt ceiling and tap international investors. 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. The FGF is a saving funds for future generations. Ali Al Mousa, a former minister of planning, said that the state’s public finances are no longer healthy, given the persistent deficit. 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 A former managing director of the General Investment Authority, Ali Al Bader, considers the deferred amounts an obligation of the state. 10. Influential voices question government move to cut funding this year. 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. Kuwait’s SWF witnesses steady growth despite crisis globally. This will save more than 1 billion dinars in the current fiscal year. Housing By law, 10 per cent of Kuwait’s revenues is transferred annually into the Fund, which invests abroad. 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. He said the government would submit legislation on that to parliament but did not specify when. Kuwait’s Future Generations Fund $290 billion (est. The FGF is savings fund for future generations where assets are invested outside of Kuwait. 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 … Between 2010 and 2016, Kuwait registered the highest growth in patents in the Arab world. These assets are not disclosed but we estimate their value at USD527 billion or around 380% of Kuwait’s GDP at the end of the fiscal year ending March 2020 (FY19/20), constituting the bulk of Kuwait’s sovereign net foreign asset position of 471% of GDP. You can manage them any time by clicking on the notification icon. The fund is run by the Kuwait Investment Authority. “Transfers made sense in the light of past budget surpluses from investments and savings. The government will provide more than 1 billion dinars ($3.25 billion) in the current fiscal year alone. Established by Amiri Decree in 1976, t he Future Generations Fund (FGF) is the flagship investment fund. © Al Nisr Publishing LLC 2020. Terms of Use 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.” 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. Therefore, a “decision to stop deducting the share of the Future Generations Fund is a natural measure,” Al Mousa said. Twitter. All rights reserved. Entrepreneurship. Being the General Reserve for the State of Kuwait, this fund is the main repository of all of the state’s oil revenues and income earned from GRF investments. The Future Generations Fund, a nest egg for when oil runs out, was set up in 1976 and is managed by the Gulf state’s sovereign wealth fund, the Kuwait Investment Authority and its overseas unit. The move could save more than 1 billion dinars ($3.25 billion) in the current fiscal year, the official said on condition of anonymity. 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. 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. The Future Generations Fund, which is managed by the Kuwait Investment Authority (KIA), automatically receives 10% of the state's oil revenue every year. ... representing the assets of the Future Generations Fund and is managed by the Kuwait Investment Authority. Today, the KIA manages two main funds: the General Reserve Fund (GRF) and the Future Generations Fund (FGF). 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. Register to read and get full access to gulfnews.com, By clicking below to sign up, you're agreeing to our 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. 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KUWAIT, June 21 (Reuters) - Kuwait is considering making an annual 10% transfer of state revenue to its wealth fund conditional on budget surpluses, a government official told Reuters, as it seeks to bolster its finances amid low oil prices and the coronavirus pandemic. $1 = 0.3079 Kuwaiti dinars Reporting by Ahmed Hagagy, writing by Davide Barbuscia, editing by Nick Macfie. • Since 1982, the Fund has been managed by the Kuwait Investment Authority. We’ll send you latest news updates through the day. But influential voices are there to back the suspension of transfer of reserves to the Fnd this year and use the savings to help the economy. KUWAIT CITY, Dec 16: MP Safa Al-Hashem has rejected the possible conjecture put forth by Fitch Ratings recently about Kuwait having to dip into the future generations’ funds. Future Generations Fund: Kuwait In Debate For Future Without Oil by vegafbs: 10:35am On Jul 06 Kuwait still one of the world’s wealthiest countries, is in a budget crunch so severe that it may have to soon begin leaning on a fund intended to prepare it for a future without oil. While a withdrawal from the fund would require an enabling law, taking out a loan or investment from the Fund would not. The government will provide more than 1 billion dinars ($ 3.25 billion) in the current fiscal year alone. Share. 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. KIA was founded on 23 February 1953 to manage the funds of the Kuwaiti Government in light of financial surpluses after the discovery of oil. Privacy Policy. While a withdrawal from the fund would require an enabling law, taking out a loan or investment from the Fund would not. KIA is the world's first and oldest sovereign wealth fund. As of July 2020. Investment Corporation of Dubai $301,527,000,000 Sovereign Wealth Fund Middle East 11. The government has been unable to borrow since a debut Eurobond in 2017, forcing it to rely on the General Reserve Fund instead. In 1982, KIA was established to take over the responsibility of managing the assets of Kuwait from the Ministry of Finance. According to a specialized economic report, despite the fact that Kuwait’s economic performance in 2020 would suffer from the double … Read More. Earlier this month Kuwait cut around $3 billion from its 2020/2021 budget as it seeks to save money. The Kuwait … 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. 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