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By Ahmed Hagagy
KOWE-T, August 19 (Reuters) – Kuwait’s parliament on Wednesday passed a law to condition government profit transfers to one of its sovereign wealth budgets to budget surpluses, a move that will provide more than $12 billion in much-needed money to the Treasury.
However, Parliament has referred a public debt law that would allow the government to borrow 20 billion dinars ($65.4 billion) over 30 years to a parliamentary committee for two weeks of further study, he said on his website.
The government and parliament have long disagreed on debt reform, which would allow Kuwait to exploit foreign markets, but the factor has become more pressing in recent months, as the oil-exporting country has been affected by low crude oil costs and the COVID-19 pandemic.
Kuwait automatically transfers 10% of the state’s profits to the Future Generation Fund, one of its sovereign wealth funds, but the law passed by the National Assembly on Wednesday will now only allow transfers to the fund when the year’s budget is surplus.
Meanwhile, 3.8 billion dinars ($12.5 billion) of accumulated cash that would otherwise have been transferred to the Future Generations Fund are being made available to the government, showed a parliamentary document noticed through Reuters.
There would also be some additional cash left for the Treasury reserved for the fund in the existing fiscal year, according to the document.
Oil-rich Kuwait faces a deficit of 14 billion dinars ($46 billion) for the existing fiscal year, which began on April 1.
Kuwait’s Finance Minister Barak Ali Al-Shitan told parliament on Wednesday that the government will have enough liquidity to cover salaries until next November. ($ 1 – 0.3051 Kuwaiti dinars) (Reported via Ahmed Hagagy; written via Lisa Barrington and Davide Barbuscia; edited by Tothrough Chopra and Hugh Lawson)
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