The government has identified 4 main parameters for withdrawing from the Future Generations Reserve Fund to fill the budget deficit. The parameters are to limit the withdrawal to a temporary period, to be limited and not to limit the growth of the Fund, and finally, to be closely linked to finding solutions to the issue of liquidity deficit, Al Qabas daily reported.
Finance Minister Khalifa Hamadeh said that it is no secret that the general reserve suffers from a lack of liquidity, and for quite some time. However, the Future Generations Reserve Fund has increased its assets by more than 30% during the past three years, due to seizing good and attractive investment opportunities, and the performance of External portfolio managers, and the performance of global markets.
Hamada added, in response to MP Mohalhal Al-Mudhaf’s question, that when the law of limited withdrawal from the Generations Reserve Fund was proposed, it was based on thorough research, and the government believes that the organized withdrawal from the Future Generations Reserve Fund and public borrowing is not a remedy for structural imbalances, but rather a transit bridge for the current stage and a tool to enable the government to gradually pursue economic reform to achieve financial stability and develop the country’s economy as required.
Allowing the government to withdraw limited funds from the Future Generations Fund will be for a limited period, and this is closely linked to finding solutions to the issue of the liquidity deficit facing the government, the proposed law defines a mechanism that enables the state to withdraw from the generations’ reserve in times of need with a certain limited amount to help.