38 ALRAQABA . ISSUE 18 Article Feature assets of the GRF and has consequently resulted in its depletion within a period of five years. This has taken place without incurring any interference from the authorities responsible for the State’s public finances, even though such interference was crucial. The concerned authorities should have taken timely comprehensive reforms in order to control the growing fiscal deficit. However, in a way to deal with the budget deficit, the Council of Ministers has passed a proposal that was submitted by the Ministry of Finance on resorting to borrowing. Based on that, the Ministry of Finance, together with the Central Bank of Kuwait and the Kuwait Investment Authority, has formed a committee for the management of public debt, which is to be responsible for making decisions related to borrowing from different potential sources. The committee decided to resort to borrowing from either the local or the global market as a temporary solution to deal with the deficit during the fiscal year 2016/2017. It is worth mentioning that Kuwait has a precedent of resorting to borrowing from the global market, which was in the period following the liberation from the Iraqi invasion in 1991, as it had received a huge loan of $5 billion. The borrowed funds were used for the reconstruction works for the damages caused by the invasion, in addition to the issuance of local bonds by the Central Bank of Kuwait on behalf of the State in order to fund some deficits in the State’s public budget. Furthermore, the Central Bank of Kuwait issues some borrowing instruments within the local market. Such activities fall within the bank’s monetary policy responsibilities mandated under Law No. 32/1968 concerning Currency, the Central Bank of Kuwait and the Organization of Banking Business. The Emergence of Kuwait’s Foreign and Domestic Debt -The Ministry of Finance has assigned the Kuwait Investment Authority to issue bonds in the global financial markets on its behalf, in the amount of $8 billion. The bonds have received an international demand for subscription multiple times, and that was mainly due to the high credit rating of Kuwait at the time. Besides, the Central Bank of Kuwait issued instruments on behalf of the Ministry of Finance to pay down the budget deficit. The following chart shows the State’s foreign and domestic debts since Kuwait started borrowing in 2016/2017. Kuwait's Public Debt on 31/3/2017 Domestic Debts: KD 3,817.25 Foreign Debts: KD 2,441.20
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