Editing Economy of Kuwait (section)

==Finance==
Kuwait has a leading position in the financial industry in the GCC.<ref name=wages>{{cite book |url=https://books.google.com/books?id=laODBQAAQBAJ|title=The Wages of Oil: Parliaments and Economic Development in Kuwait and the UAE|editor=Michael Herb|isbn=9780801454684|last1=Herb|first1=Michael|date=18 December 2014|publisher=Cornell University Press }}</ref> The Emir has promoted the idea that Kuwait should focus its energies, in terms of economic development, on the financial industry.<ref name=wages/>

The historical preeminence of Kuwait (among the Gulf monarchies) in finance dates back to the founding of the [[National Bank of Kuwait]] in 1952.<ref name=wages/> The bank was the first local publicly traded corporation in the Gulf.<ref name=wages/> In the late 1970s and early 1980s, an alternative stock market, trading in shares of Gulf companies, emerged in Kuwait, the [[Souk Al-Manakh stock market crash|Souk Al-Manakh]].<ref name=wages/> At its peak, its market capitalization was the third highest in the world, behind only the [[United States|U.S.]] and [[Japan]], and ahead of the [[United Kingdom|UK]] and [[France]].<ref name=wages/>

Kuwait has a large wealth-management industry.<ref name=wages/> Kuwaiti investment companies administer more assets than those of any other GCC country, save the much larger Saudi Arabia.<ref name=wages/> The Kuwait Financial Centre, in a rough calculation, estimated that Kuwaiti firms accounted for over one-third of the total assets under management in the GCC.<ref name=wages/>

The relative strength of Kuwait in the financial industry extends to its stock market.<ref name=wages/> For many years, the total valuation of all companies listed on the Kuwaiti exchange far exceeded the value of those on any other GCC bourse, except Saudi Arabia.<ref name=wages/> In 2011, financial and banking companies made up more than half of the market capitalization of the Kuwaiti bourse; among all the Gulf states, the market capitalization of Kuwaiti financial-sector firms was, in total, behind only that of Saudi Arabia.<ref name=wages/> In recent years, Kuwaiti investment companies have invested large percentages of their assets abroad, and their foreign assets have become substantially larger than their domestic assets.<ref name=wages/>

Kuwait is a major source of foreign economic assistance to other states through the [[Kuwait Fund for Arab Economic Development]], an autonomous state institution created in 1961 on the pattern of Western and international development agencies. Over the years aid was annually provided to Egypt, Syria, and Jordan, as well as the Palestine Liberation Organization. In 1974, the fund's lending mandate was expanded to include all developing countries in the world.

===Reserve funds===
{{main|Kuwait Investment Authority}}
The [[Kuwait Investment Authority]] (KIA) is Kuwait's [[sovereign wealth fund]] specializing in foreign investment. The KIA is the world's oldest sovereign wealth fund. Since 1953, the Kuwaiti government has directed investments into Europe, United States and [[Asia Pacific]]. In 2021, the holdings were valued at around $700 billion in assets.<ref name="swf1"/> It was the [[Sovereign wealth fund#Largest sovereign wealth funds|3rd largest]] sovereign wealth fund in the world.<ref name="swf1">{{cite web|title=SWFI|url=https://www.swfinstitute.org/fund-rankings/sovereign-wealth-fund|date=16 July 2021|access-date=16 July 2021|archive-date=8 May 2020|archive-url=https://web.archive.org/web/20200508173939/https://www.swfinstitute.org/fund-rankings/sovereign-wealth-fund|url-status=live}}</ref><ref name="bloomberg_swf">{{Cite web|url=https://www.bloomberg.com/news/articles/2021-07-02/kuwait-s-life-after-oil-fund-swells-to-a-record-700-billion|title=World's Oldest Wealth Fund Swells to Record and Cracks the Top 3|date=2 July 2021|website=[[Bloomberg News|Bloomberg]]|access-date=16 July 2021|archive-date=26 November 2022|archive-url=https://web.archive.org/web/20221126052253/https://www.bloomberg.com/news/articles/2021-07-02/kuwait-s-life-after-oil-fund-swells-to-a-record-700-billion|url-status=live}}</ref>

The KIA manages two funds: the General Reserve Fund (GRF) and Future Generations Fund (FGF).<ref name="kia">{{cite web|url=http://fletcher.tufts.edu/SWFI-OLD/~/media/Fletcher/Microsites/swfi/pdfs/2012/profiles/KIA%20Fund%20Profile_v2.pdf|title=Fund Profile: Kuwait Investment Authority (KIA)|pages=1–3|access-date=17 August 2014|archive-date=26 December 2013|archive-url=https://web.archive.org/web/20131226152729/https://fletcher.tufts.edu/SWFI-OLD/~/media/Fletcher/Microsites/swfi/pdfs/2012/profiles/KIA%20Fund%20Profile_v2.pdf|url-status=dead}}</ref> The GRF is the main treasurer for the government.<ref name=kia/> It receives all state revenues and all national expenditures are paid out of this fund.<ref name=kia/> The KIA does not disclose its financial assets in public, but it is estimated that the KIA has $410 billion in assets as of February 2014.

The KIA was the main source of capital for the Kuwaiti government during the [[Gulf War]]. The Kuwaiti government relied on the KIA to pay for coalition expenses and postwar reconstruction.<ref>{{cite web
|url=http://www.ideationcenter.com/ideation_research/ideation_article/vital_role_of_sovereign_wealth_funds_in_the_gcc
|title=The Vital Role of Sovereign Wealth Funds in the GCC's Future
|access-date=17 August 2014
|archive-date=19 August 2014
|archive-url=https://web.archive.org/web/20140819091052/http://www.ideationcenter.com/ideation_research/ideation_article/vital_role_of_sovereign_wealth_funds_in_the_gcc
|url-status=dead
}}</ref> The KIA was worth $100 billion prior to 1990, KIA funds were depleted to $40–$50 billion after the Gulf War.

In July 2023, Kuwait plans to create a new sovereign fund, Ciyada, in partnership with the Kuwait Investment Authority (KIA). While the value of the fund has not been specified, the KIA, which currently manages over $800 billion in assets, will play a significant role in studying and implementing the proposed fund. The aim is to develop the local economy, attract foreign investment, and finance major projects to promote economic diversification in Kuwait.<ref>{{Cite news |last= Hagagy |first= Ahmed |date= 2023-07-16 |title= Kuwait to set up new sovereign fund to develop mega projects and local economy |language= en |work= Reuters |url= https://www.reuters.com/world/middle-east/kuwait-set-up-new-sovereign-fund-develop-mega-projects-local-economy-2023-07-16/ |access-date= 2023-07-31 |archive-date= 31 July 2023 |archive-url= https://web.archive.org/web/20230731083812/https://www.reuters.com/world/middle-east/kuwait-set-up-new-sovereign-fund-develop-mega-projects-local-economy-2023-07-16/ |url-status= live }}</ref>

;Future Generations Fund
The Future Generations Fund (FGF) was created in 1976 by transferring 50% from the general reserve fund at that time. The FGF is a saving funds for future generations. 25% of all state revenues are annually transferred to the fund.<ref>{{cite web|url=http://ccsi.columbia.edu/files/2014/04/nrf_Kuwait_September2013_RWI_VCC.pdf|title=Kuwait's Future Generations Fund|pages=2|access-date=17 August 2014|archive-date=19 August 2014|archive-url=https://web.archive.org/web/20140819102844/http://ccsi.columbia.edu/files/2014/04/nrf_Kuwait_September2013_RWI_VCC.pdf|url-status=dead}}</ref>

All of the FGF is invested abroad, with an estimated 75% invested in the US and [[Europe]] and the rest in emerging markets, mainly China and India.