Kuwait’s Finance Minister Barrak Al-Sheetan urged as a necessity the parliamentary approval of the draft public debt law and the draft law on the Future Generations reserve fund in light of the country’s budget deficit and lack of liquidity. This came in a speech by Al-Sheetan, as ministers and lawmakers discussed on Wednesday a draft law which authorizes the government to take public loans and financing from local and international markets.
“In light of the lack of borrowing and the failure to implement economic reforms, the state’s general reserve will run out of liquidity and will not be able to cover its expenditures due to the deficit,” he told lawmakers at the National Assembly. He referred to the justifications for the request to cover this deficit, related to government employee salaries, subsidies, current expenditures and construction projects.
This will allow time to implement economic reforms, he said. He argued that this comes to compensate for the lack of revenues in the face of expenditures in light of the sharp decline in oil prices, to tackle the coronavirus pandemic, reduce the impact of short-term reforms on nationals and to not compromise Future Generations fund investments, allowing the fund to grow. He mentioned several solutions, proposed by the government, to address the shortage, including the exchange of assets between the State General Reserve Fund and the Future Generations Fund, saying this has become “inevitable.” Other options include the issuance of sovereign bonds, deemed lucrative, along with what he said, “should be the last resort”, of borrowing from the Future Generations Fund.
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