Dipping into FGF, a red-line warn lawmakers

The very suggestion that the government might begin withdrawing money from the Future Generations Fund (FGF) has raised the ire of lawmakers.

Global ratings agency, Fitch Ratings, in a recent commentary on Kuwait’s financial situation, had suggested that the government might soon be compelled to draw from the FGF to tide over budget deficits. The agency said that consecutive budget deficits and relatively low oil prices had begun to deplete the General Reserve Fund (GRF), on which the government normally relies for overcoming budget shortcomings.

Head of the National Assembly’s financial and economic affairs committee MP Safa Al-Hashem along with other lawmakers categorically rejected the suggestion, saying no funds can be withdrawn from FGF as it is exclusively for use by future generations. They called on the government to diversify sources of income rather than rely on oil revenues and to take measures to raise income and lower expenses.

Lawmakers added that had the government adopted prudent financial policies to diversify the economy, raise revenues and slash spending, the country would not be in the current predicament.

However, it needs to be pointed out that attempts by the government to rationalize spending, by cutting subsidies, introducing a new public wage bill, or borrowing from abroad through debt issuances, have been opposed or stalled by parliament.

For his part, MP Adel Al-Damkhi said the government should stop squandering public funds, adopt measures to boost public revenues and diversify sources of income away from oil. Damkhi added that the parliament refused to debate the public debt bill, because there were financial sources other than debt that could be tapped into, and moreover, the government had not specified where it intended to spend the debts obtained through issuing international bonds.

 

Meanwhile, Head of the Assembly’s budget committee MP Adnan Abdulsamad called yesterday for regulating financial aid given by the government to encourage Kuwaitis to seek jobs in the private sector. He said that it is illogical to provide such aid to Kuwaitis who draw salaries as high as KD17,000 per month, adding that the aid should not be paid to those who receive over KD5,000 as salaries.