New push to boost Future Generation Fund’s revenues
A NUMBER of options have to be considered to boost the Future Generation Fund’s revenues, the Shura Council heard.
Chairman Ali Al Saleh proposed that for every barrel of oil or gas produced $1 be added to the fund, instead of just taking a cut from oil exported.
From January this year, $1 is being saved from every barrel of oil exported if the international price is above $40 per barrel, $2 from every barrel if the price is above $80 per barrel, and $3 if the global price shoots up to $120 per barrel or more.
Under amendments to the Future Generations Fund Set-up Law, approved by the National Assembly and ratified by His Majesty King Hamad last year, the practice will change to $1.25 per barrel if oil prices ranged between $50 and $60, $1.50 if they were between $60 and $70 and so on, until it reaches $3 in 2025.
“The current times are tough, and it is going to get tougher,” said Mr Al Saleh, during the chamber’s weekly session yesterday.
“For that I proposed that in addition to the cuts, set aside $1 for each barrel of oil or gas produced.”
The Cabinet will now look into the proposal.
Meanwhile, there was disagreement between Finance and National Economy Ministry Finance Under-Secretary Yousif Humood and Shura Council first vice-chairman Jamal Fakhro over whether $450 million taken from the Future Generations Fund to combat Covid-19 in 2020 was a grant or a loan.
“The $450m taken from the fund, which is a government reserve, approved by Parliament and the Shura Council in 2020 doesn’t state it is a loan,” said Mr Humood.
“However, it does state that it should be recovered.”
He added that a tower built from the fund’s coffers will be ready this year and a real estate consultant will be hired to help rent it out.
Shura members unanimously approved the 2021 closing financial statement of the fund along with the recommendations.
The fund had $627m in 2021 compared with $520.9m in 2020, which is an increase of 20.4 per cent.
Shura financial and economic affairs committee chairman Khalid Al Maskati said BD51m profits were gained from investments made by the fund in 2021, which is excellent in light of the global impact of Covid-19.
“The fund was set up in 2006, so it is just 17 years old, but its strong management has seen it turn into a strong financial reserve for future generations,” he said.
“Around 80pc of the investments are made in US dollars, 12.5pc in British pounds, 4.8pc in euros and around one per cent in Swiss francs and the rest in miscellaneous currencies.
“Six per cent is invested in Bahrain, seven per cent in the GCC, 45pc in the US, 30pc in Europe and 3.2pc in emerging markets and 4.1pc in Asian markets including Japan and the rest in other areas.”
Shura Council member Abdulla Al Nuaimi suggested that the fund’s management approach the King to get plots as grants and turn them into investments for regular income.
