KUWAIT: MPs quoted head of the Kuwait Investment Authority (KIA) that Kuwait?s foreign investments have dropped by KD 9 billion ($30.9 billion) as a result of the global economic downturn.

The revelation was made during a close-door session at the National Assembly to debate the financial status of the country in the wake of the global economic crisis that has negatively affected the value of assets and investments.

MP Waleed Al-Tabtabae told reporters after the session that KIA chief Bader Al-Saad said in his presentation that the losses were made in the period between March 31 and December 31 last year. He also said that Saad emphasized that they were ?book losses? and could be recovered because Kuwait is a long-term investor.

Liberal MP Mohammad Al-Abduljader confirmed the figure and said that according to the presentation, Kuwait?s investments dropped from around KD 58 billion on March 31 last year to around KD 49 billion on Dec 31. Abduljader however said that a number of MPs raised questions about the small volume of the losses and the Assembly agreed to ask the Audit Bureau to establish if the figures were correct.

The figure means that Kuwaiti foreign investments dropped by around 15 percent only last year, contrary to reports which claimed that the assets of sovereign wealth funds have fallen by around 40 percent. Saad told the Assembly that the $5 billion KIA injected into the Citibank and Merrill Lynch last year dropped by around $2.2 billion and is currently worth $2.8 billion.

Saad however declined to make any comment when he left the Assembly. The Assembly then agreed to refer the report on the financial status of the country to its budgets committee and also asked the Audit Bureau to submit its report within 60 days. On Sunday, the government unveiled a multi-billion dollar stimulus plan that includes wide-ranging state guarantees for bank loans and assisting troubled investment firms to repay their debts. Last year, Kuwait guaranteed deposits of all banks operating in the cou
ntry. A number of Kuwaiti investment companies have defaulted on loans as credit facilities have become difficult to obtain and the value of their assets has plunged.

Meanwhile, KIA might consider increasing its support for Dow Chemical Co?s disputed takeover of Rohm and Haas Co, the Financial Times reported yesterday. Dow agreed in July to acquire rival Rohm and Haas for $15.3 billion in a bid to expand its specialty chemicals business. But last month, Dow said it would not close the deal on schedule in light of deteriorating economic conditions and the failure of a key joint venture with Kuwait - the proceeds of which were to fund the Rohm and Haas deal.

PIC, an arm of the Kuwait Petroleum Corp, was supposed to contribute $7.5 billion to help pay for the acquisition, but the state cancelled the deal in December after some lawmakers voiced opposition. Investor Warren Buffett had agreed to contribute $3 billion and the KIA was to have added $1 billion, according to a Wall Street filing in October.