A recent report from the Global SWF organization has revealed that Kuwait’s sovereign wealth assets are rapidly approaching the trillion-dollar mark, currently standing at approximately $984 billion. This positions Kuwait as the 12th largest sovereign wealth holder globally and the third in the Gulf and Arab world, following the UAE and Saudi Arabia, as reported by Al-Anba daily.
The report provides valuable insights into Kuwait’s financial landscape, highlighting that these assets are equivalent to 5.3 times Kuwait’s GDP. These sovereign wealth assets encompass holdings from various entities, including the General Authority for Investment, the Kuwait Public Institution for Social Insurance, and the Central Bank of Kuwait.
Notably, the majority of these assets are held by the Kuwait Investment Authority, particularly the Future Generations Fund, which has a total value of $801 billion, representing 81.4% of the government’s overall sovereign wealth assets. Additionally, the Public Institution for Social Security (PIFSS) manages assets worth $137 billion.
In the past year, governments around the world have been actively supporting their local economies through various means. For instance, the General Organization for Social Insurance in Kuwait acquired government land worth $8.1 billion, while the Public Investment Fund in Saudi Arabia agreed to finance the construction of the world’s largest green hydrogen production plant. This highlights the commitment of sovereign wealth funds in the region, led by the Saudi Public Investment Fund, to bolster their local economies.
The report underscores this trend and sheds light on the Kuwaiti government’s plans to activate the “Sovereign” Fund as part of its ambitious 4-year program for sustainable economic growth. This demonstrates Kuwait’s proactive approach in utilizing its sovereign wealth assets to drive economic development and diversification.
Looking ahead, the report predicts that by 2030, Gulf sovereign funds could reach a total value of $7.6 trillion. Furthermore, with the inclusion of pension funds and central bank assets, the Middle East and North Africa region could potentially see this figure rise to $11.2 trillion. These projections highlight the significant role that sovereign wealth funds will play in shaping the economic landscape of the region in the coming years.
While China, Japan, and Norway currently boast the largest sovereign funds in terms of total asset value, it is worth noting that the United States leads globally in total sovereign wealth assets, surpassing $11.3 trillion. The UAE ranks fourth globally with total sovereign wealth assets of $2.2 trillion, followed by Saudi Arabia in seventh place with $1.6 trillion.
In light of global economic challenges, including growth slowdowns and rising inflation, governments worldwide are responding by injecting investments to stimulate growth. They are relying on their sovereign wealth assets and incorporating the investment element into their budgets to counter increasing public spending and debt obligations.
Kuwait’s growing sovereign wealth assets signify the country’s commitment to long-term financial stability and economic prosperity. As these assets continue to approach the trillion-dollar mark, Kuwait is positioned to play a significant role in the global financial landscape, contributing to regional economic growth and diversification efforts.
In conclusion, Kuwait’s sovereign wealth assets are rapidly growing and approaching the trillion-dollar mark. With strategic plans in place to activate the “Sovereign” Fund and promote sustainable economic growth, Kuwait is well-positioned to leverage its wealth assets for the benefit of its economy and the region as a whole.
Source: TimesKuwait
