Billions In the Bank, Yet Kuwait Is Squeezed For Cash

When Kuwait’s prime minister returns to office in the coming weeks, he faces an apparent paradox: the Gulf state with a $550bn sovereign wealth fund is running short on cash to pay ballooning public sector salaries, the Financial Times reported. Oil accounts for 90 per cent of its revenue, but slumping prices have hit the western ally’s income hard, putting its forecast deficit close to 40 per cent of GDP, higher than it was in the 1990s, during the financially perilous aftermath of the first Gulf war when Iraq invaded Kuwait. While other Gulf states have turned to global debt markets to fund themselves through the pandemic, Kuwait is hamstrung by parliament’s refusal to renew a debt law that elapsed in 2017. Any attempt to tap into the country’s large sovereign wealth fund is also opposed by lawmakers as it would undermine its function as a nest egg for future generations. Read more