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Saudi Arabia’s Shura Council, a consultative body which advises the government, last week considered a proposal to establish a sovereign wealth fund (SWF) for the kingdom, without reaching a decision.
A committee from the council said that it had completed drafting a proposal to establish the fund; this was then submitted to the members for discussion. But the committee’s members were divided – some questioned the need to create a wealth fund to manage the kingdom’s investments, arguing that they are adequately being handled by the country’s central bank, the Saudi Arabian Monetary Agency (SAMA).
Sa’d Mariq, head of the Shura Council committee told London-based daily Asharq al-Awsat of 7 June that under the proposal, the fund will be allocated 30% of accumulated reserves from past budget surpluses. These reserves, according to the IMF, will reach $842bn by the end of 2017 – a sum that would in theory catapult the fund into second place on a ranking of the world’s top SWFs (see table). Dr Mariq says the aim of establishing the fund, also known as the “National Reserve Fund” is to accumulate financial surpluses and invest them to realize maximum returns. The fund, which would enjoy financial and administrative autonomy, is intended to ensure financial stability in the kingdom. The prime minister’s office will supervise the new entity, which will be based in Riyadh with branches inside or outside the kingdom. (CONTINUED - 968 WORDS)
DATA INSIDE THIS ARTICLE
|table||Global Sovereign Wealth Fund Rankings|