Kuwait seeks to find ways to overcome its severe liquidity crisis (AFP)</p><div><p>Reuters quoted two sources as saying that <a target="_blank" href="https://www.alaraby.co.uk/305-%D9%85%D9%84%D9%8A%D8%A7%D8%B1%D8%A7%D8%AA-%D8%AF%D9%88%D9%84%D8%A7%D8%B1-%D8%A7%D8%B3%D8%AA%D8%AB%D9%85%D8%A7%D8%B1%D8%A7%D8%AA-%D8%A7%D9%84%D8%B5%D9%86%D8%AF%D9%88%D9%82-%D8%A7%D9%84%D8%B3%D9%8A%D8%A7%D8%AF%D9%8A-%D8%A7%D9%84%D9%83%D9%88%D9%8A%D8%AA%D9%8A-%D9%81%D9%8A-%D8%A3%D9%85%D9%8A%D8%B1%D9%83%D8%A7" rel="noopener">Kuwait Sovereign Wealth Fund</a> He is negotiating with the state-owned Kuwait Petroleum Corporation in order to reach a new agreement, whereby the Corporation will pay an amount of more than $ 20 billion from the profits it has accumulated, at a time when the Gulf state seeks to find ways to overcome the severe liquidity crisis it faces.
ولدى Kuwait Petroleum Corporation About 7 billion dinars ($ 23.14 billion) have been owed for years as dividends to the General Reserve Fund, which is managed by the General Investment Authority and is a sovereign fund.
The two sources said that the General Reserve Fund andKuwait Petroleum Corporation In the past few years, they reached an agreement on scheduling the payment, but the fund is currently seeking to review the agreement and speed up the payment process, as part of the government’s efforts to cover the fiscal deficit that the general budget suffers from.
One of the sources said, “The Petroleum Corporation is suffering due to the drop in oil prices, and the government also has a problem with financial liquidity. The corporation wants the longest possible period (to repay) and the government wants the largest amount possible.”
The former Minister of Finance, Barak Al-Sheitan, announced last April that he had asked the Minister of Oil, as Chairman of the Board of Directors of the Kuwait Petroleum Corporation, to transfer the amount of profits withheld by the Corporation, which is approximately 7 billion dinars, to the state treasury represented in the General Reserve Fund.
The two sources said that the negotiations aimed to reach an agreement that would not affect the cash flow of the Kuwait Petroleum Corporation. The Kuwait Petroleum Corporation and the Kuwait General Investment Authority, which manages the General Reserve Fund, did not immediately respond to requests for comment.
The oil-rich Gulf state, which has been hit hard by the fall in crude prices and the repercussions of the Covid-19 pandemic, faces short-term liquidity risks, largely due to the National Assembly’s failure to allow the government to borrow.
These negotiations are the latest in a series of government attempts aimed at enhancing the liquidity of the public treasury in light of its inability to borrow due to Parliament’s refusal.
Kuwait is witnessing an almost permanent state of tension between the government and parliament that largely disrupts the structural reforms needed in a country that depends almost entirely on oil.