KUWAIT: Kuwait plans to issue between $13 billion and $16 billion in public debt by the end of the fiscal year ending March 2021 if parliament approves a long-debated debt law, a government document seen by Reuters showed.
Facing one of the worst economic crunches in the oil-exporting Gulf region, Kuwait is scrambling to boost state coffers badly hit by the coronavirus crisis and low crude prices, rapidly depleting its General Reserve Fund (GRF) to plug a budget deficit.
A parliamentary committee is due to vote on the law — which would allow Kuwait to tap international debt markets — on Sunday ahead of putting it to the elected assembly for approval.
Legislators have been requesting more visibility from the state about use of the funds and repayment mechanisms given the government’s heavy reliance on oil income.
“The government will face a real crisis in everything if the debt law is not passed,” a government official told Reuters on condition of anonymity.
The law, which a parliamentary committee discussed last week, would allow it to borrow 20 billion dinars ($65 billion) over 30 years.
Other Gulf states have tapped international markets over the past few years and the region saw more issuances when oil prices crashed earlier this year as the pandemic hit global demand.
Even with parliamentary approval, Kuwait could need three to four months to prepare a debt sale, according to the government document.
A finance ministry official declined to comment when contacted by Reuters.
Kuwait has already depleted the cash in its GRF, the document showed. The International Monetary Fund estimates the deficit could reach more than 11 percent of gross domestic product this year, compared with a 4.8 percent surplus last year.
The finance ministry also proposed selling 2.2 billion dinars of the GRF’s assets to Kuwait’s other — much larger — sovereign fund, the Future Generations Fund, or borrowing from the central bank to boost state finances, the document showed.
Finance Minister Barak Al-Sheatan said in a statement published in state media on Saturday that the ministry submitted to cabinet “available options for securing sufficient liquidity” and that the government had approved an “interim financial reform scheme.” He did not specify the measures approved.
“The government looks forward to the legislative authority’s cooperation,” Sheatan said in the statement issued after S&P Global Ratings on Friday revised Kuwait’s outlook to ‘negative’ from ‘stable’.
Kuwait’s 91-year-old Emir Sheikh Sabah Al-Ahmad Al-Sabah underwent successful surgery on Sunday morning after being admitted to hospital on Saturday, his office said. His designated successor Crown Prince Sheikh Nawaf Al-Ahmed Al-Sabah temporarily took over some of the ruler’s constitutional duties on Saturday.
The document said the cabinet approved a slate of reforms aimed at diversifying state revenues away from oil, but it did not specify them.
Lawmaker Riyadh Al-Adsani had tweeted that reforms include introducing value-added tax and excise taxes, a tax on net profits of private businesses, reforming the wage structure in the bloated public sector, slashing some benefits and raising utility prices.
Successive parliaments have hampered far reaching economic reform plans over the past decade in a country whose citizens are accustomed to a cradle-to-grave welfare system. Kuwait is due to hold parliamentary elections in the next several months.
Deutsche Bank estimates its economy will contract by 7.8 percent this year, the biggest fall among Gulf states.
Last month Kuwait’s government approved a cut to state entities’ budgets by at least 20 percent. It is also considering making an annual 10 percent transfer of state revenue to the Future Generations Fund conditional on budget surpluses, a move that could save it some $3 billion in the current fiscal year.
Kuwait scrambles to boost coffers with up to $16 billion debt plan
Kuwait scrambles to boost coffers with up to $16 billion debt plan
- Other Gulf states have tapped international markets over the past few years
- Kuwait could need three to four months to prepare a debt sale
Artificial intelligence is transitioning into a ‘digital employee’
- AI can be an effective tool, business leaders tell Arab News
- Not about jobs, but ‘convergence of human capital and AI’
RIYADH: Artificial intelligence is fundamentally reshaping the world of work, transitioning from a supporting tool to an active partner that is radically changing the nature of professions and productivity standards.
Amidst the current global transformations, an active regional digital environment is emerging.
This is being led by Saudi Arabia through Vision 2030 and massive investments in smart infrastructure, providing a living model for studying the implications of this partnership between humans and machines on the future of work in the region.
Arab News spoke to various business leaders about the emerging shape of the sector.
Salem Bagami, co-founder of Metatalent, said the ideal relationship between humans and machines at work should be complementary and collaborative.
Humans would bring creativity, emotional intelligence, and complex decision-making, while machines excel at processing big data and performing repetitive, precise tasks.
He believes that this type of balanced partnership would lead to unprecedented productivity and innovation.
Mohammad Al-Jallad, chief technologist and director at HPE, said AI has gone beyond being merely an executive tool to becoming a “digital employee” entrusted with automating routine tasks and providing insights based on data analysis.
He believes that the real opportunity lies not in the debate over job replacement, but in “the convergence of human capital and artificial intelligence.”
AI should augment human teams by taking on menial and routine tasks, enabling employees to focus on critical thinking, creativity, and ethical reasoning, significantly improving operational results.
Bagami also emphasized the complementary nature of this partnership. “The ideal relationship between humans and machines at work is one of collaboration, where each complements the others.”
He explained that humans bring creativity, emotional intelligence, and nuanced decision-making, while machines excel at processing big data and performing repetitive tasks efficiently, leading to increased productivity and innovation.
Opinion
This section contains relevant reference points, placed in (Opinion field)
Salem Alanazi, chairman of Jathwa Technology Co., notes a significant trend among Saudi Arabia companies toward using AI applications to provide faster services to customers at lower costs.
The emergence of the “virtual employee” available around the clock has eliminated the need for some traditional jobs in specific sectors.
Alanazi warns that some companies’ reluctance to adopt AI may expose them to real risks. “All those who hesitated to benefit from AI applications have a lack of understanding of these technologies.”
He said those who adopt these technologies will be able to offer lower-cost, higher-quality services, which will affect the market position of companies that lag behind.
Ali Aljumhour, CEO of VALUE Consultancy, said that the transition of AI into a partner has reshaped the list of most in-demand skills in the job market.
Skills such as “prompt engineering,” “human-machine integration,” and “digital ethics” are becoming increasingly important.
He added that AI has become an instantly available “technical knowledge base,” shifting the criteria for professional distinction toward those capable of smart interaction with these technologies.
In terms of ethics, transparency, and trust, Alanazi points to the complexities of global AI governance, where legislation overlaps and evolves rapidly to keep pace with potential risks, particularly in the areas of cybersecurity and privacy.
Al-Jallad emphasizes this crucial dimension, noting that providing responsible and reliable AI solutions that meet the highest standards of transparency is a key priority, especially in regulated sectors.
Bagami believes there should be basic standards for the ethical use of Al, emphasizing the need for transparency, accountability, and fairness, along with using diverse data sets to prevent bias and protect privacy.
He believes that building trust between humans and machines requires clear explanations of how systems work, giving users the opportunity to provide feedback and conducting periodic performance reviews.
On performance evaluation, Aljumhour said: “I expect radical changes in standards, shifting from measuring individual effort to evaluating the quality of the partnership between humans and machines.”
There should be a focus on the quality of inputs provided to intelligent systems, the accuracy of review and modification, and complex decision-making based on outputs.
He warns, however, of new risks that may arise, such as over-reliance on AI or difficulty in determining responsibility for mistakes.
In the employment sector, Aljumhour expects fundamental changes in standards.
There will be questions and tests focusing on measuring skills in dealing with AI, such as asking candidates about their experiences of collaborating with these systems, or testing their ability to formulate effective requests for complex tasks.
Aljumhour identifies significant human challenges in this transition, with “fear, loss of power, and exclusivity of knowledge” being the biggest concerns for experienced employees.
