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Kuwait Unveils Plan to Prepare Durra Field, Sovereign Investment Fund for Local Investment

People watch as the "buck moon" rises over the skyline of Kuwait City on July 3, 2023. (AFP)
People watch as the "buck moon" rises over the skyline of Kuwait City on July 3, 2023. (AFP)
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Kuwait Unveils Plan to Prepare Durra Field, Sovereign Investment Fund for Local Investment

People watch as the "buck moon" rises over the skyline of Kuwait City on July 3, 2023. (AFP)
People watch as the "buck moon" rises over the skyline of Kuwait City on July 3, 2023. (AFP)

The Kuwaiti government has announced a plan to strengthen the comprehensive infrastructure of the offshore Durra oil and gas field.

Not only that, the government will also look to elevate the production of unrestricted gas (excluding the Divided Zone) from 521 million cubic feet per day to a staggering 930 million cubic feet per day.

The recently unveiled four-year government action plan, spanning from 2023 to 2027, has been submitted to the National Assembly, outlining the meticulous preparations for the infrastructure development of the Durra field.

According to the plan, the infrastructure provisioning for the field is slated to take place in the fourth year of the program.

Parliament Speaker Ahmed Al-Sadoun has extended an invitation to convene a special session next Tuesday to discuss the government’s action plan.

The government has revealed its intention to study the establishment of a sovereign investment fund to drive development and enhance local economic activity.

Additionally, it includes a strategy to elevate the classification of Kuwait’s financial markets from emerging markets to advanced emerging markets by the FTSE Russell Index.

Moreover, another plan aims to gradually digitize 90% of government services over the next four years.

The government plan aims to empower the private sector to fulfill its role “under effective state oversight” while ensuring that the state establishes an atmosphere of trust to encourage local investment and attract foreign capital.

The government’s action program also includes the development of a comprehensive framework for reviewing salaries in the public sector through updating the strategic alternative study.

This is intended to align compensation with merit and productivity, while encouraging a shift towards private sector employment to streamline costs on the state’s finances.

Prime Minister Sheikh Ahmed Nawaf Al-Ahmad Al-Jaber Al-Sabah emphasized that the government’s action program aims to solidify reforms, address challenges, and boost development for the progress of the country.

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IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
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IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)

Pakistan has received “significant financing assurances” from China, Saudi Arabia and the United Arab Emirates linked to a new International Monetary Fund (IMF) program that go beyond a deal to roll over $12 billion in bilateral loans owed to them by Islamabad, IMF Pakistan Mission Chief Nathan Porter said on Thursday.

Porter declined to provide details of additional financing amounts committed by the three countries but said they would come on top of the debt rollover.

The IMF's Executive Board on Wednesday approved a new $7 billion loan for cash-strapped Pakistan, more than two months after the two sides said they had reached an agreement.

The loan — which Islamabad will receive in installments over 37 months — is aimed at boosting Pakistan's ailing economy.

“I won't go into the specifics, but UAE, China and the Kingdom of Saudi Arabia all provided significant financing assurances joined up in this program,” Porter told reporters on a conference call.

The global lender said its immediate disbursement will be about $1 billion.

In a statement issued Thursday, the IMF praised Pakistan for taking key steps to restore economic stability. Growth has rebounded, inflation has fallen to single digits, and a calm foreign exchange market have allowed the rebuilding of reserve buffers.

But it also criticized authorities. The IMF warned that, despite the progress, Pakistan’s vulnerabilities and structural challenges remained formidable.

It said a difficult business environment, weak governance, and an outsized role of the state hindered investment, while the tax base remained too narrow.

“Spending on health and education has been insufficient to tackle persistent poverty, and inadequate infrastructure investment has limited economic potential and left Pakistan vulnerable to the impact of climate change,” it warned.

Prime Minister Shehbaz Sharif in a statement hailed the deal that his team had been negotiating with the IMF since June.

Sharif, on the sidelines of the United Nations General Assembly, told Pakistani media that the country had fulfilled all of the lender’s conditions, with help from China and Saudi Arabia.

“Without their support, this would not have been possible,” he said, without elaborating on what assistance Beijing and Riyadh had provided to get the deal over the line.

The Pakistani government has vowed to increase its tax intake, in line with IMF requirements, despite protests in recent months by retailers and some opposition parties over the new tax scheme and high electricity rates.

Pakistan for decades has been relying on IMF loans to meet its economic needs.

The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.

Inflation has since tempered, and credit ratings agency Moody’s has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to “Caa2” from “Caa3”, citing improving macroeconomic conditions and moderately better government liquidity and external positions.