Kuwaiti sovereign fund trapped in a power struggle
A new term has yet to be approved as political differences extend to a disagreement over the make-up of the nine-member board
Close-up of Kuwaiti bank notes (toned). Image used for illustrative purpose.
By Staff Writer, Arab News
RIYADH: Kuwait’s $600 billion sovereign wealth fund has been trapped in the midst of a power struggle, entering in limbo since its board’s tenure expired two months ago, Bloomberg reported.
A new term has yet to be approved as political differences extend to a disagreement over the make-up of the nine-member board, Bloomberg said, citing a person familiar with the matter.
The Future Generations Fund is run by the Kuwait Investment Authority KIA and designed as a savings pot for life after oil, and is largely unbreakable without parliament’s approval.
KIA is in a state of uncertainty and policy making is paralyzed, which prompted ratings agencies to warn of downgrades, leaving the government scrambling for cash.
The deep confrontation between members of the only elected parliament in the Gulf and a government whose leader is appointed by the ruling Emir has prevented the state from borrowing and left it with barely enough cash to pay public sector salaries, Bloomberg said.
This dispute is also delaying investment and economic reforms, including welfare reform, which the government said is needed to end eight consecutive years of budget deficits, Bloomberg reported.
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