An expert for Arabic: This is how the new Kuwaiti “Siyada” fund works

The economist, Muhammad Ramadan, said that the Kuwait Investment Authority (KIA) has two basic funds. The first is the Future Generations Reserve Fund, which invests outside Kuwait away from the oil sector. The second is the General Reserve Fund, which is like the state’s current account.

He added in an interview with Al-Arabiya that the main fund is the Future Generations Fund, which contains huge sums, and the General Reserve Fund, from which the state spends on various matters.

He pointed out that Kuwait is currently working on structuring the General Reserve Fund and establishing a new “Siyada” fund similar to the Bahraini “Mumtalakat” fund on the local side.

He explained that according to what was mentioned in the government’s business program, the new Kuwaiti “Siyada” fund will be affiliated with the Ministry of Finance and the General Authority for Investment.

And “the matter is still with the Ministry of Finance, and the dismissal of the General Authority for Investment was not a successful procedure due to the great interdependence between them, and the evidence for that is currently in the government’s business programme,” according to Ramadan.

He added, “In my opinion, state property was supposed to be part of this fund, but there is a restructuring and new legislation for state property with another device. The process will take two years, while the “Siyadah” fund will take one year. Therefore, we expect in the future that state property will be merged within the “Siyadah” fund to achieve general economic benefit and economic growth.

He pointed out that the General Reserve Fund was the one that was benefiting from oil revenues, while the Future Generations Fund was benefiting from the surpluses until its volume became large, reaching $800 billion, according to the latest report.

He pointed out that the financing of the “Siyadah” fund will be from the property of the state itself, and the General Reserve Fund has existing properties, and it is assumed that other properties will be added in order for it to carry out the work entrusted to it in cooperation with the private sector.

He ruled out the existence of a challenge facing these funds represented in the lack of coordination between them, and said that these funds are completely different and are still affiliated with the General Investment Authority, and a good step will achieve internal economic growth in cooperation with the private sector.

He pointed out that the Kuwait Capital Markets Authority and Boursa Kuwait succeeded in previous times in entering global indices such as the “FTSE Russell” index, and it is not unlikely that they will succeed in improving their classification in the index from emerging markets to advanced emerging markets during the next 4 years, especially in light of the government’s plan that aims to achieve public interests, and whoever stands behind these matters will seriously strive to achieve them, and he added, “We do not rule out this step, as the capabilities exist and are harnessed for that.”

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