KIA cuts costs & its hands � Alpha Dinar- talking GCC finance

According to several sources, Kuwait Investment Authority (KIA) is cutting costs. This is not a bad thing in and of itself. Although this comes at a time when oil prices are at $75/barrel and the KIA sits on $202.8 billion* of assets under management, cost cuts are usually a good thing and point to a disciplined style of management. However, the alarming fact is that the KIA is cutting-costs across the board which is an easy yet very dangerous approach. The biggest victim of this approach? Kuwait.

The KIA website states that the the authority aims to “contribute to the national development by investing in human resources.” This goal has been more than fulfilled during the previous years as KIA had trained highly qualified Kuwaitis and transformed them into business leaders capable of excelling at the highest levels in both private and public sectors. Moreover, KIA’s yearly MBA scholarship recipients have been steadily joining the workforce armed with unrivaled world-class education from leading universities such as Harvard, Stanford, MIT, London Business School, and Wharton Business school. Such an education enables the youth to emerge as future Kuwaiti leaders.

The shocking news is that KIA is cutting its training budget at a time of economic prosperity, massive multi-billion dollar development plans, and efforts to transform Kuwait into a regional financial hub. On the contrary, we would’ve expected prioritizing the investment in human capital as it is a perpetually beneficial investment considered a corner stone for the prosperity of any country. The training program and MBA scholarships cost KIA less than KD 1 million a year. Is it too much for an institution worth $200 billion? We doubt. Will Kuwait reap benefits from world-class educated and trained individuals? You bet!

In a previous post, we applauded KIA’s Managing Director (Bader Al-Saad) for his relentless reform efforts since the beginning of his tenure. Also, in the most recent parliamentary discussions of the KIA budget Minister of Finance Mr. Al-Shamali requested an increase in the training and MBA scholarships budget. We now call upon them and all parliament members to reinstate the renowned MBA scholarships program and the semi-annual version of the training program. Such an act will not only relieve the Kuwaiti youth, but also restore our hopes of a better future for Kuwait.

* According to the Sovereign Wealth Fund Institute.