Kuwait's Prime Minister Sheikh Sabah Khaled Al Sabah was reappointed last month to form a new government following the resignation of his previous Cabinet. Reuters
Kuwait's Prime Minister Sheikh Sabah Khaled Al Sabah was reappointed last month to form a new government following the resignation of his previous Cabinet. Reuters
Kuwait's Prime Minister Sheikh Sabah Khaled Al Sabah was reappointed last month to form a new government following the resignation of his previous Cabinet. Reuters
Kuwait's Prime Minister Sheikh Sabah Khaled Al Sabah was reappointed last month to form a new government following the resignation of his previous Cabinet. Reuters

Gulf

Kuwait's Emir issues decree forming new government under PM Sheikh Sabah

Sheikh Sabah Al Khaled Al Sabah forms his fourth Cabinet in two years

Ismaeel Naar
Ismaeel Naar

December 28, 2021

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  • Arabic

Kuwait’s Emir issued a decree on Tuesday to form a new government under Prime Minister Sheikh Sabah Khaled Al Sabah.

Sheikh Sabah has given Emir Sheikh Nawaf a list of the proposed names for the new 15-member Cabinet, the Kuwait News Agency reported.

Sheikh Sabah was reappointed last month to form a new government following the resignation of his previous Cabinet after a political stand-off with the Kuwaiti Parliament.

Also reappointed as Deputy Prime Minister and Minister of Oil is Mohammed Abdul Latif Al Fares, who has announced an oil production target for the ministry of 3.5 million barrels per day by 2025 from the current 2.6m bpd production average.

If reached, the production target will reverse a recent decline in the country’s oil output.

The latest government formation comes after Sheikh Nawaf issued two decrees last month granting pardons or reduced sentences for 35 dissidents.

At the time, a government source told The National that the formation of the new Cabinet would include opposition MPs while the prime minister and speaker of Parliament would keep their posts.

National Assembly Speaker Marzouq Al Ghanim said on Monday he hoped the prime minister would form a Cabinet that “meets the aspirations of the Kuwaiti people”. He confirmed that Parliament would resume its sessions from January 4 if a Cabinet was formed this week.

Reconciliation effort

Hopes have run high that some degree of reconciliation would help ease the passage of delayed laws.

Abdulwahab Al Rushaid replaces Khalifa Hamada as finance minister, state media reported. Mr Al Rushaid was head of the Kuwait Economics Society, which represents the views of private sector business.

He arrives in the post following government efforts to temporarily boost finances while more structural and fiscal reforms have yet to be passed, including a debt law to tap international markets.

Mr Al Rushaid is widely seen as an outspoken, young figure with substantial support from merchant families.

Kuwaiti analysts on social media suggested that the new appointments could weaken the sway of opposition members of Parliament who have blocked government reforms.

He will also now head the Kuwait Investment Authority, which manages the country’s $700 billion sovereign wealth fund, designed to reduce dependence on oil-related investments.

The Opec member, home to about 8.5 per cent of the world’s oil reserves, posted a record budget deficit in the last fiscal year due in part to a plunge in oil prices and the coronavirus pandemic.

Years of political tension have stymied efforts to diversify the oil-reliant economy and promote foreign investment, leaving Kuwait particularly vulnerable.

More parliamentarians now have tribal representation in the new Cabinet and may be persuaded to support the government.

Sheikh Nawaf wished the prime minister luck and expressed “hope that the executive and legislative branches would co-operate for the sake of Kuwait’s development and welfare”, the state-run KUNA news agency reported.

Who is in Kuwait's new Cabinet?

Deputy Prime Minister and Minister of Defence: Hamad Jaber Al Ali Al Sabah

Deputy Prime Minister and Minister of Interior: Ahmad Mansour Al Ahmad Al Sabah

Deputy Prime Minister, Minister of Oil, and Minister of Electricity, Water and Renewable Energy: Dr Mohammed Abdul Latif Al Fares

Minister of Awqaf (Endowment) and Islamic Affairs: Issa Ahmad Al Kandari

Minister of Foreign Affairs and Minister of State for Cabinet Affairs: Dr Ahmad Nasser Al Mohammed Al Sabah

Minister of State for Municipal Affairs and Minister of State for Communication and Information Technology: Dr Rana Abdullah Al Fares

Minister of Education and Minister of Higher Education and Scientific Research: Dr Ali Fahad Al Mudhaf

Minister of Justice and Minister of State for Nazaha (Integrity) Enhancement: Justice Jamal Hadhel Al Jalwai

Minister of Information and Minister of Culture: Dr Hamad Ahmad Rouhaddeen

Minister of Health: Dr Khaled Mhawes Al Saeed

Minister of Finance and Minister of State for Economic Affairs and Investment: Abdulwahab Mohammed Al Rushaid

Minister of Public Works and Minister of State for Youth Affairs: Ali Hussein Al Mousa

Minister of Commerce and Industry: Fahad Mutlaq Al Shurai'an

Minister of Social Affairs and Community Development: Mubarak Zaid Al Mutairi

Minister of State for Housing Affairs and Urban Development: Mubarak Zaid Al Mutairi

Minister of State for National Assembly Affairs: Mohammad Obaid Al Rajhi

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Fireball

Moscow claimed it hit the largest military fuel storage facility in Ukraine, triggering a huge fireball at the site.

A plume of black smoke rose from a fuel storage facility in the village of Kalynivka outside Kyiv on Friday after Russia said it had destroyed the military site with Kalibr cruise missiles.

"On the evening of March 24, Kalibr high-precision sea-based cruise missiles attacked a fuel base in the village of Kalynivka near Kyiv," the Russian defence ministry said in a statement.

Ukraine confirmed the strike, saying the village some 40 kilometres south-west of Kyiv was targeted.

Updated: December 28, 2021, 8:00 PM
Kuwait