Perhaps today we can discern a financing direction that has become increasingly clear, particularly after Financing and Liquidity Law No. 60 of 2025 established a fixed debt ceiling of KD30 billion, followed last Tuesday by Law No. 81 of 2026, amending certain provisions of Decree-Law No. 106 of 1976 concerning the Future Generations Fund and reshaping its relationship with the General Reserve Fund.

Our previous reading of the Financing and Liquidity Law detailed the need for that ceiling to be variable, with any increase tied solely to growth in the net exports and investment components of gross domestic product, rather than remaining merely fixed. Such a requirement represents a form of "economic rigor" that ensures the quality of borrowing, directing it toward capital investment rather than current expenditure.

Today, however, Law No. 81 of 2026 introduces "governance rigor" by making the investment performance of the Future Generations Fund a benchmark. Most notably, new loans within any single fiscal year may not exceed 100% of the Fund's average realized returns over the preceding five audited financial years, while the total outstanding balance of accumulated loans may not exceed 10% of the Fund's net assets. The law also introduces "accounting rigor," affirming that a loan is not treated as a withdrawal or permanent deduction, but rather recorded as a receivable asset in favor of the Future Generations Fund, together with its return. It gives such loans priority in repayment when a fiscal surplus is realized and stipulates that no loan may be written off or reduced except by law. Yet despite requiring the Council of Ministers to determine the amount, purpose, return, maturity and repayment schedule of each loan, its "economic rigor" concerning the quality of borrowing does not match the governance and accounting rigor embodied in its provisions. The sustainable components of the GDP equation remain absent.

What is worth noting today, according to our legislative reading, is that each law establishes its own borrowing ceiling. The first applies to borrowing associated with direct contracts with banks and financial institutions or the use of financial instruments, while its second article refers to borrowing through methods and instruments commonly used in local and international financial markets. The second, by contrast, applies exclusively to borrowing from the Future Generations Fund. This brings us to a clear realization: borrowing capacity has increased substantially, even if one of its two legislative components is largely book-entry in nature.

This book-entry consideration stems from the methodologies of most credit rating agencies, which do not regard borrowing between government entities as genuine public debt. Some specialists may view this as a positive argument in favor of Kuwait's credit rating. Yet that argument may, at the same time, somewhat overlook the potential decline in the Future Generations Fund's external assets and the extent to which such a decline could affect Kuwait's credit rating.

May God decree for this nation a course of wisdom and sound judgment…