A $600 Billion Wealth Fund Is Caught In A Political Power Struggle

The Kuwait Investment Authority, the world's oldest state investment vehicle, has been in limbo since its board's tenure expired two months ago.

A $600 billion sovereign wealth fund is caught in the crosshairs of a political power struggle that's roiling one of the world's richest countries. The Kuwait Investment Authority, the world's oldest state investment vehicle, has been in limbo since its board's tenure expired two months ago. A new term has yet to be approved as political differences spill over into a disagreement over the make-up of the nine-member board, according to a person familiar with the matter. The uncertainty now hanging over the KIA, which manages Kuwait's vast oil wealth through two key funds, is emblematic of a broader malaise that's paralyzed policy making, prompted ratings agencies to warn of downgrades and perversely left the government of a major OPEC crude exporter scrambling for cash. KIA officials were not immediately available for comment. It's all part of a deep standoff between members of the only elected parliament in the Gulf and a government whose leader is appointed by the ruling Emir, a deadlock that's blocked the state from borrowing and left it with barely enough to pay public sector salaries. The dispute's also delaying investment and economic reforms, including an overhaul of the welfare state the government says is needed to end eight consecutive years of budget deficits.