Wahda and Awad: Not an external investment, and one trillion is enough

There is no doubt that the Shahin project is a financing arrangement. This borrowing model is well-known and widely practiced in many countries to provide liquidity, similar to bonds. It was a mistake to describe it as foreign investment, because a foreign investor would not bring his own project to Kuwait to build, employ, provide services, and transfer technology. Instead, under the project, (by establishing a new company with Kuwait Oil Company), he would lease the existing oil pipelines for 20 years, pay the agreed billions, and then lease them back to the oil company in a manner that generates profits for him according to agreed fees based on oil flow.

This project may have a security objective, but personally, I believe that Kuwait’s security arrangements are far more substantial than this project.

If we truly wish to attract foreign investment, the first step is to provide the land on which the investor will establish his project. The primary reason for the failure of all efforts by the committees promoting foreign investment, one of which I chaired for a short period, was the lack of available land for investors, whether for factories, schools, universities, hospitals, markets, recreational services, or other services. The second reason is the complexity of licensing procedures and the lengthy documentation process, which remains lagging behind development. It would be beneficial if the government were to inquire, for example, about the burdensome documentation cycle in various state ministries to connect electricity to even a simple building.

Using financing for economic reforms and projects that generate state revenue and new jobs is the correct way to utilize such funds. Kuwait Oil Company has confirmed that it will use the financing to increase oil production to four million barrels per day. The major error would be to use the financing for any ongoing expenditure that does not benefit the Kuwaiti economy.

I believe it is better to utilize returns from both types of reserves (the General Reserve and the Future Generations Fund) to finance these developmental works, land reclamation, and provision of land to investors. This is preferable to borrowing or financing with interest, because borrowing carries known risks, and increasing it entails greater dangers. I fear that borrowing may increase due to the current war and the inability to export oil, while we simultaneously possess one trillion dollars in external investments. I consider this substantial amount sufficient, and there is no justification for not using a small portion of its returns for our developmental projects. Furthermore, there is no reason to insist on increasing and inflating it amid the political and economic risks facing the US economy and its massive debts, in addition to the envy and continuous threats we hear from some US politicians regarding the seizure of part of our wealth, the imposition of fees or taxes on us, our need to purchase air defenses, or the worst-case scenario: being forced to compensate for their losses in Iran, other reparations, or the reconstruction of some countries after wars they mismanaged. Therefore, we say that one trillion dollars is sufficient, and we should utilize its returns for developmental projects and build our country with our own money rather than through financing and interest-bearing borrowing.