Finance Minister Nayef Al-Hajraf said on Sunday that performance of Kuwait’s Future Generations Fund (FGF) is “very good and there is no decline in its assets.” On the contrary, the value of the FGF assets is continuously growing, Al-Hajraf told a meeting for the government with a joint parliamentary committee, according to a statement issued by the Finance Ministry.
The meeting which tackled means of enhancing state’s general reserves, brought together the ministers with the parliamentary committees on budget and final accounts, financial and economic affairs, and legislative legal affairs, and the government.
Reviewing the outlook of monetary assets or their equivalent in the General Reserve Fund (GRF) for the next five years, the minister said: “They are not positive despite the recovery of oil prices over the last period”.
The liquidity of the GRF will not improve even if the rise in oil prices continues, he noted.
The data and figures circulated by the press on a decline of the assets of the FGF are mere “external and false estimates by uninformed agencies,” he stressed.
Al-Hajraf affirmed that maintaining liquidity of the GRF is the responsibility of the executive and legislative powers, although the former bears the largest part in this regard. He pointed out that the legislative power is able to strengthen the GRF through enacting necessary legislations.
The approximate assets of the GRF until the end of the FY 2017-2018 hit KD 26.4 billion (USD 87 billon), monetary assets, or their equivalent, and the liquid investments, KD 13.2 billion (USD 43.5 billion) each.
During the meeting, the minister reviewed several scenarios of oil prices from USD 70 to USD 100 per a barrel, and the potential impact on GRF liquidity.
He referred to “the inevitability of depletion of liquidity of the GRF in all scenarios,” with the variability of the period of exhaustion according to the annual rate of oil prices.
In remarks to reporters on the sidelines of the meeting, Al-Hajraf said that they aimed to clarify real challenges facing Kuwait in terms of preserving general reserves.
“We have affirmed that the performance of the FGF is based on a very solid ground, but the performance of the GRF, especially liquidity, is decreasing very significantly and required to be strengthened and addressed,” he said.
A presentation to the cabinet meeting last week, the minister focused on the problems facing the GRF, and the proposed solutions to strengthen the reserves.
The state’s financial status would be revealed at the end of this legislative term, he said The meeting was attended by Deputy Prime Minister and Defense Minister Sheikh Nasser Sabah Al-Ahmad Al-Sabah, Deputy Prime Minister and Minister of State for Cabinet Affairs Anas Al-Saleh, Minister of Social Affairs and Labor and Minister State for Economic Affairs Hind Al-Sabeeh, Minister of State for National Assembly Affairs Adel Al-Kherafi and CEO of the KIA Farouk Bastaki The GRF assets and the income are available for use by the state as determined by the government through passing an annual budget by the parliament. The GRF is one of two funds managed by Kuwait Investment Authority (KIA) and is considered the public treasury. It is the major account that receives all the state’s oil revenues and income.
The FGF, Kuwait’s Sovereign Fund, is the platform portfolio that receives 10 percent of the state’s total revenues annually for investment. According to law, FGF are not disclosed.
Source: Kuwait News Agency