What is the cause of parliamentary and popular anger?
Statements by the Minister of Finance in which he said that his country will pump more investments in Egypt.
What is the reason for this rejection?
To claim pump investments in Kuwait.
Why is Kuwait turning to investing abroad?
to diversify its investment portfolio.
Kuwaiti investments abroad are one of the main drivers of capital that yields large returns, especially in Arab countries, despite some of the risks they face.
While the Kuwaiti investment authority, which manages the country’s sovereign wealth fund, seeks to continue to diversify its investment portfolio and redistribute investment risks, investors and businessmen are using it to diversify their investments with their potential capabilities in some Arab countries. met with parliamentary anger.
Investors and the government have found themselves facing demands to stop investing in Arab countries, and to transfer those investments to the country, which is facing government investment and senior Kuwaiti businessmen of parliamentary anger and asking whether the matter may turn into a law that prevents them. take out of their money to invest abroad.
Following statements made by Kuwaiti Finance Minister Abdul-Wahhab Al-Rasheed, in which he urged Kuwaiti businessmen to pump more investment into Egypt, Kuwaiti National Assembly delegates rejected this move.
Among these delegates is Representative Bader Al-Humaidi (June 2022), who called for “directing Kuwait’s investments inwards,” which rejected the Finance Minister’s statement on the matter.
He said: “All investments in Egypt and the Arab countries have been unsuccessful, and they have not yielded results,” as evidenced by “Kuwait’s investments in Morocco, and according to what an official told me, the Moroccan authorities the withdrawal of any sums, whether capital or profits. “
He added: “Our investments are supposed to be within Kuwait through the development of islands, the construction of factories, the development of ports, the direction of the construction of alternative energy, the development of youth projects, the development of infrastructure, electricity and roads, the creation of jobs, the provision of housing care and the assistance of needy citizens.The money of the land belongs to the people of the land.
In turn, MP Osama Al-Shaheen said: The people “refuse to pump more public funds into Egypt, especially with our failure to recover state deposits from there.”
He added that “diplomatic courtesy is not at the expense of the national economy,” and blamed the finance minister “politically responsible for any step in this direction”.
During his meeting with the Egyptian Minister of Planning and Economic Development, Hala Al-Saeed, the Kuwaiti Minister of Finance Abdul-Wahhab Al-Rasheed reaffirmed Kuwait’s interest in the public and private sectors to invest in Egypt, and to pump in more investments. all sectors where real investment opportunities are available.
The Kuwaiti minister’s statements sparked a flurry of anger among many Kuwait on social networking sites as they saw their country and its children earn this money more.
In a tone of doubt about the outcomes of Kuwait deposits and investments in Egypt, Abdul Rahman Al-Hudayb called on the Kuwaiti Minister of Finance to ask the Egyptian Minister of Finance: “Did the Egyptian people benefit from these deposits and investments in the Egyptian economy? “
Attorney Dalal Al-Mulla commented by saying: The General Investment Authority “invests in Egypt and Morocco with the funds of the General Reserve Fund and the Reserve for Future Generations,” and asks: “Why is our money not in our state, Kuwait , do not invest! “
Another activist went even further into skepticism, asking about the secret of the flow of Kuwait investments and deposits in Egypt, adding: “Leave us in the picture, he is more than alone.
For example, the volume of Kuwaiti direct and indirect investments in Egypt amounted to $ 15 billion, of which $ 4 billion and $ 900 million were registered with the Egyptian Investment Authority, and the rest were diversified in the areas of stock market, real estate companies, fertilizers, petroleum, services, banks, industry and trade.
The value of Kuwait investments in Egypt amounted to $ 353.5 million during the 2020/2021 financial year, compared to $ 363.7 million during the 2019/2020 financial year, a decrease of 2.8%.
Also in Morocco, Kuwait’s investments in 2019 amounted to $ 200 million, according to the economic website “Yallapress”, which represents 2.5% of the total investments of the Arab Gulf states in Morocco, which amounts to about $ 9 billion, and about 0.5% of the total market capitalization, at a time when it ranks 11th with 1.2% in the volume of foreign investment in Moroccan shares exceeding $ 20 billion.
Representative Syed Adnan Abdel Samad announced under the umbrella of the Kuwaiti parliament that Egypt would not return Kuwait deposits amounting to 4 billion along with their interests.
Balance between inside and outside
In an economic reading of these developments in Kuwait, political economy expert Hussein Al-Binaa said: “The natural thing is that countries seek to attract foreign capital to invest in the country, whether it is in the form of direct and stable investments in the boards or in the form of speculative hot money in the market Shares, bonds and currencies.
Al-Binaa added in his speech to Al-Khaleej Online: “All this is in the hope of creating a stimulating investment for, among other things, economic growth, employment, development and the state’s tax and customs revenue. “
He continued, “The Kuwaiti market in particular may be characterized by limited space and investment options, despite its need to pump large investments in the electric power sector and infrastructure, and to support small entrepreneurial projects for individuals.”
On the other hand, we find that large investment cash flows from Kuwait annually as part of the desire of individual businessmen as well as public and private investment funds to diversify the scope and areas of investment as an approach to reduce risks, diversify returns . , and stabilize revenue and profits.
He pointed out that this comes in the light of a world in which countries and governments are rushing to improve the investment environment that attracts global capital.
He stressed that “politics can not be separated from the economy, and therefore a significant part of the investment decision will be politically motivated, such as the development and development of political relations between governments, at the same time to punish some countries by depriving them and block investment flows towards them, as money and investment are a tool to exert influence and power. “
There appears to be a clear political orientation adopted by the Kuwaiti authorities to improve financial investment flows to some markets, of which Egypt and Morocco are the most prominent, “as part of the development of strategically balanced political and economic relations, in particular with regard to the General Investment Authority and its sovereign funds, “according to the economist.
He pointed out that “because of this financial investment flow, the parliamentarians are demanding that local priority be given to investing in areas that need to inject funds into it. From here, the legality of proposing the idea of legalizing investments flows to the abroad by special legislation that takes into account the balance between internal requirements and external investment opportunities. “
The expert in political economy believes that such legislation “because of its implications must be formulated and studied in depth to achieve the values of economic freedom and at the same time balance between the different interests of all parties.”