MPs reject any withdrawals from future generations fund

$10bn for 2019-20 development plan – Call for curbs on private sector labor support

KUWAIT: MPs rejected yesterday the possibility that the government might be compelled to withdraw from the Reserve Fund for Future Generations as suggested by Fitch Ratings in a report on Kuwait’s finances. The agency said in the report that the government could be forced to withdraw from the fund to meet a growing budget deficit amid low oil prices and the depletion of the state reserve fund, which the government normally taps in case of need.

Head of the National Assembly’s financial and economic affairs committee MP Safa Al-Hashem categorically rejected the suggestion, saying no funds can be withdrawn from the future generations fund because it is exclusively for the next generations. She said that the Assembly has repeatedly warned the government to diversify sources of income against an almost total dependence on oil for public revenues and also cautioned the government to take measures to raise income and reduce expenditure.

The lawmaker said that if the government had adopted a prudent financial policy to raise and diversify revenues and cut spending, the country would not have reached this stage. The report comes amid warnings that the state reserve fund is running out of money faster than expected. It also comes after the National Assembly refused to debate a draft law allowing the government to seek debt. Hashem said that the bill was not debated because government officials did not have answers to where the loans would be spent.

MP Adel Al-Damkhi said the government should stop squandering public funds, adopt measures to boost public revenues and diversify sources of income away from oil. Damkhi said rejecting to debate the public debt bill was not because of political problems, but because there were financial sources other than debt, adding that the Assembly had asked the government to specify where the debts would have been spent. He said he is opposed to any withdrawal from the future generations fund because there are other avenues to get money, adding that the government must collect its debts.

Head of the Assembly’s budgets committee MP Adnan Abdulsamad called yesterday for regulating financial aid given by the government to encourage Kuwaitis to seek jobs in the private sector. He said that it is illogical to provide such aid to Kuwaitis who draw salaries as high as KD 17,000 per month, adding that the aid should not be paid to those who receive KD 5,000 or more monthly.

MP Saleh Ashour yesterday called on HH the Prime Minister Sheikh Sabah Al-Khaled Al-Sabah to speed up the formation of the Cabinet, saying it has taken too long, which is harmful to public issues. He also urged the prime minister to pay greater attention to resolving the issue of tens of thousands of stateless people or bedoons.

Meanwhile, financial allocations for Kuwait’s development plan (2019-2020) amount to KD 3.3 billion ($10.9 billion) against KD 3.8 billion ($12.5 billion) in 2018-2019. Speaking at a news conference, Khaled Mahdi, Secretary General of the Supreme Council for Planning and Development, said 135 projects are included in the plan – 51 are 38 percent in the preparatory stage and 75 ones are 56 percent in the executive phase. The 2019-2020 plan envisages five planned ventures, execution of which remain in initial stages.

Overall expenditure on the envisioned projects in the first half of 2019-2020 amounted to KD 620 million ($2 billion) against KD 1.8 billion ($6.2 billion) during the same period of the 2018-2019 plan. Proportion of projects in executive phase in the 2019-2020 plan amounted to 56 percent compared to 59 percent in the 2018-2019 scheme and 53 percent in the 2017-2018 one. On challenges facing the execution, Mahdi said there were 212 administrative hurdles, 104 snags of financial nature, 161 technical obstacles, 85 issues with supervisory authorities and 19 for legal reasons. Up to 80 percent of these complications have been successfully tackled, he elaborated.
The number of strategic enterprises in the 2019-2020 plan reached 22, with annual financial allocations estimated at KD 2.7 billion ($8.9 billion), 20.2 percent of which was spent by the end of the first half of the year. The strategic projects include four concerning high quality healthcare spending estimated at 9.68 percent, one on human creativity, 33.97 percent on spending and five on a sustainable living environment (8.05 percent). They also included six projects dealing with modern infrastructure (20.7 percent) and six on a sustainable and diverse economy with 22.73 percent expenditure.

By B Izzak