Kuwait Fails To Recover 118 Million Dinars From 25 Nations

Kuwait Fund for Arab Economic Development has confirmed that its "sovereign" loans cannot be canceled, repaid, or waived, adhering to a longstanding policy. Reports Al-Rai daily state that 25 countries have defaulted on repaying their principal loans, accumulating debts totaling 118 million Kuwaiti dinars.

Five countries owe 90% of these debts: Syria, Sudan, Yemen, Cuba, and the Democratic People's Republic of Korea (North Korea).

Foreign Minister Sheikh Salem Al-Sabah provided this information to the Fund in response to a parliamentary inquiry by MP Jarrah Al-Fawzan regarding the number of countries that defaulted or refused to repay their loans.

KFAED clarified that the distressed countries are either experiencing political instability or facing boycotts from international organizations, so the Fund is unable to engage with them. It was noted that the Fund halts loan withdrawals if the borrowing countries fail to meet their payment obligations, including installments and interest, as specified.

The Fund reiterated its policy of not entering into loan agreements with defaulting countries until they settle their outstanding arrears. It reiterated that the loans it extends are considered “sovereign loans,” firmly non-negotiable or forgivable — a policy maintained by Kuwait since the Fund’s establishment.

Over the past 15 years, the Fund has granted approximately 3 billion dinars in loans, and approximately 240 million dinars in grants. The majority of grants, 85 percent, were allocated to fulfill Kuwait’s commitments and pledges regarding the Syrian refugee crises and the reconstruction of affected areas in Palestine.

Since the Fund's inception, 407 loans have been repaid, totaling around 2 billion dinars as of July 2023, which represents approximately 29.86 percent of the total loan amount.

The repayment periods for these loans vary from 18 to 30 years, averaging 23 years. As a result, there are still outstanding loans for which borrowing countries are meeting their installment and interest obligations on a regular basis. According to the agreed repayment dates specified in these loan agreements, there are a total of 605 loans with an approximate lending value of 4.7 billion dinars. Out of this, about 2.2 billion dinars have been withdrawn, and approximately 1.4 billion dinars have been repaid.

According to the Development Fund, it granted the Lebanese Republic 286 million dinars in loans.

 

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