The Director- Finance & Investment Directorate of the Kuwait Foundation for the Advancement of Sciences (KFAS), Mr. Firas Aloda, has revealed the Foundation’s new strategy to invest budget surplus accumulated since its inception, to ensure returns that cover the variance between KFAS expenditures and the annual contributions of the shareholding companies. Sound long-term investment policies have been planned with a conservative investment approach to ensure the ability of the Foundation to meet its financial obligations and to maintain expenditure stability while maximizing its long-term purchasing power to meet the needs of the future generation. .
During his interview with Al-Qabas newspaper, Mr. Aloda emphasized KFAS strict oversight and audit protocol adopted by its Board of Directors and supported by a set of policies and procedures designed to meet the needs of the Foundation in the context of having pre and post audit and an external auditor who examines all financial transactions and notes their compatibility with international standards in an annual report submitted to the Board of Directors.
Mr. Aloda also praised the role of the Kuwaiti private sector companies for their contributions to support the Foundation. He reminded the readers that spending on scientific research in Kuwait amounts to a mere 0.3% of the total GDP, while it reaches more than 1% in neighboring countries. He also recognized the role of KFAS in availing financial support needed for research, in the dissemination of a scientific culture, in stimulating innovation, in supporting national projects, in elevating national academic excellence, in strengthening scientific infrastructure, and in raising the scientific and cultural awareness in Kuwait.
Details of the intervieware as follows:
- Initially we congratulate KFAS for its 40thanniversaryas it wasestablished in December 1976and then wewould like to know more about the development of KFAS strategic plans?
In 2011,KFAS started implementing its new strategy aimedat strengthening scientific,technological and intellectual progress in Kuwait and the GCCthroughstimulatingthesciencesto ensure a sustainable future in the regionthrough:providing financial support for research inbasic and applied sciences,the disseminationof scientific culture, motivatingandsponsoringinnovationin the country,supportingprojects of national priority, strengthening national academic excellence and scientificinfrastructure,organizing seminarsand scientific conferences,andthedissemination of scientific knowledge throughpublications,magazines, books and scientific encyclopedias,in addition tosponsoringrelevantcultural and social activitiesto enhance and increase thelevelof scientific and cultural awareness.
The Financial Strategy
- This is on the scientific side, but what about the financial strategy of the Foundation? Did it undergo any changes?
Indeedany new strategy must be accompanied by a financial strategy to meet its ambitions and objectives. The Foundation has adopted anewlong-termstrategy to investits budget surplus accumulatedsince its inception, to ensurereturnsthroughsticking to soundlong-terminvestment policies witha conservativelow risk and cautiousinvestmentapproachand other international investment instruments that present acceptable risk versus return ratio,to ensure theabilityof theFoundationto meet its financial obligationsand to maintainexpenditurestability whilemaximizingits long-termpurchasing powertomeet the needs of thefuture generation.
- TheFoundationrelies onthecontributionreceived fromthe Kuwaitiprivateshareholding companiesper1% oftheirannualnet profit,what is theannualvalue of thiscontribution? Is it enough to meet the needs and aspirations of theFoundation,since we realize thatsupport forscientific research andscientific activities in othercountriescanreachup to 5% of theGDPof these countries?
Theannualcontributionsamounttoapproximately 20 to 25 millionKuwaiti Dinars,which is farbelowthe needs and requirements of theFoundation, especially after theadoption ofitsnew strategy. The Foundations’annualplans andactivitiesexceedthe annual contributions received from shareholdingcompanies. This situationpreventsthe Foundationfrom meetingitsobligations and fulfillingitsaspirationsand objectives. Thissituation alsohas prompted KFAStopursueotherfundingsourcesthroughadoptingbestinternationalstrategiesimplemented insimilar global institutionsandbyinvestingtheaccumulated surplus to achieveenough returns thatbridgethegapbetween expenditures and contributionsreceived fromtheshareholding companies.
- How much is allocated forscientificresearch inKuwait?
Around 0.3% ofthe GDP, which is alow percentagecompared toneighboringcountriesinthe regionsuch asthe Emirates,SaudiArabia and Qatar, wherethe percentage reachesmore than 1%. At KFAS,we strive to raise this percentagein Kuwaittoreach 2 – 3%as is the case in thedeveloped countries.
- Whatare thetypesand conditions ofgrants provided byKFAS? Are they offeredto individuals ortoinstitutions?
KFAS offers multiple types of scholarships and grants for the development of human resources capacities at the shareholding companies to improve productivity and performance and to advance economic development in the country through science, technology and innovation. KFAS also organizes training courses, either internally or in collaboration with other entities, such as the Kuwait Chamber of Commerce and Industry, and various Kuwaiti Companies Unions, or other specialized associations of specific sectors of the shareholding companies or non-governmental organizations. KFAS supports scientific research in the scientific and industrial institutions in Kuwait through the Directorate of Research at KFAS, giving priority to programs and projects relevant to development, including research in water, energy and the environment.
- What is the role of KFASinsustainable development?
KFASseeks to achieve comprehensive development bymeeting the needs ofcurrentgenerations through:the development of theirskills andproduction capacity,providing scholarships andtraining programs, disseminatingscience and communityculture,enhancingeducation and public awareness,andprotectingpublichealth. KFAS also provides support inchanging energy consumptionpatterns, which would contribute to the optimal utilization of natural resources and preservationfor future generations, without compromising its ability to meet its current needs, thus contributing to promoting sustainable development to ensure a decent life stylenowandinthefuture.
- Does the Foundation have a role in supporting Science - oriented government agencies?
The Foundation provides support for a number of government agencies, including the Kuwait Institute for Scientific Research, Kuwait University and the Public Authority for Applied Education and Training, in addition to many NGOs.
- What about small and medium entrepreneurs, do they have a share of such support?
Yes, through Sabah Al-Ahmad Center, the Foundation provides needed support for innovators to finance their inventions and innovations to turn them into small and medium-sized enterprises in cooperation with the Projects Fund. The aim is to allow innovators to work with scientific and research agencies to help them meet their targets and solve their problems in STI and to develop their management capacities. Furthermore, the Foundation offers Innovation Vouchers dedicated for supporting research for companies that endeavor to conduct research in collaboration with research institutions in Kuwait and abroad. We also publish and disseminate success stories and always try to attract new projects.
- What is the sum of the Foundation’s grants annually disbursed to its affiliate centers? Is it sufficient?There are many centers founded by the Foundation to benefit the public. All these initiatives are made to enhance KFAS’s strategic directions in establishing a culture of science and development in the country focusing on national priorities to achieve long term sustainability. The Foundation’s support granted to its specialized scientific centers reaches 41% of its total annual budget, which is around 32 million Dinars:DasmanDiabetes Institute receives 28%; Sabah Al-Ahmad Center for Giftedness andCreativity gets 10%; andJaberAl-Ahmad Center for Nuclear Medicine and Molecular Imaging is granted 3%.
- What regulatory oversights and audits applied on the Foundation given that its budget is in the tens of million Dinars?
According to theAmiriDecree establishing the Foundation, the Board of Directors under the chairmanship of H.H. the Amir provides the oversight over the executive management of the Foundation. The Foundation has adopted strict regulatory protocol approved by the Board of Directors supported by a range of clear policies and procedures applicable to its entire staff. These procedures have been planned specifically to accommodate the requirements of the Foundation in a regulatory framework through a self- assessment program for scrutiny conducted through various steps, including prior audit. This is performed by the Monitoring and Reporting Unit, which checks all transactions to ensure relevance to established policies and procedures prior to implementation. Post audit is performed by the Internal Auditor appointed by the Board of Directors who conducts periodic reviews of all completed transactions looking for consistency with established policies and procedures. The Internal Auditor notes, in the periodic reports, the status of all transactions and presents said reports before the Audit Committee established by the Board of Directors. In the final stage, the external auditor examines all completed financial transactions and prepares the final financial statements. The external auditor expresses opinion about the conformity of such transactions with international standards and submits the Annual report to the Board of Directors.
- What is the role and significance of the private sector as a key partner of the Foundation?
Undoubtedly, the private sector initiative represented by the Kuwaiti shareholding companies has played a pivotal role in establishing the Foundation as well as in supporting and funding its activities to achieve sustainable development. The private sector and the Foundation are cognizant of their corporate social responsibility. As the Foundation continues to actively play its societal role, it supports private companies which in turn entice these shareholding companies to persist with their financial contribution to the Foundation.
- What does the Foundation offer these companies in return?
Companies that adhere to corporate social responsibility voluntarily will create a competitive advantage for themselves through substantial tax incentives, such as the incentives availed in the United States and the European Union and even China. These are labelled “the green tax incentives”. The Foundation is keen on having such incentives applied in Kuwait and seeks to achieve this target through proposed new tax laws and legislation. The Foundation provides opportunities and venues to these companies to take advantage of the Foundation’s plans that contribute to the development of work processes in these companies to improve productivity and services and ways to attract new customers, or to attain substantial reduction in their costs. Such scheme attracts and encourages companies to increase their participation and association with the Foundation.
Projects sponsored by theFoundation:
- Develop a virtual Kuwait University concept in collaboration with various local and international entities. The project’s premise is based on excellence in e-learning in addition to distance education dealing with basic courses as offered at regular universities. The foundation has allocated around 4% per annum of its budget over three years to implement the project.
- The Scientific Center expansion area of 4500 square meters west of the Center for a building to house the dolphins and marine mammals, in addition to an interactive educational exhibition of marine mammals and exploration facility. The estimated cost of this expansion is about 26 million KD and is expected to be open for visitors in early 2018.
- Projects in integrated PV solar systems are sponsored by the Foundation and are being implemented in cooperation with the Kuwait Institute for scientific research. These projects aim at contributing to achieving a target to provide 15% of domestic demand of electricity by drawing on clean renewable energy. These projects were allocated around 11% of the Foundation’s 2015 annual budget.
- Scientific alternatives to physical challenges in urban areas for the delivery of electricity and water to new cities within the sustainable development plan. Nearly 5% of the Foundation's budget was allocated for these projects.
KFAS is inspired andfollowstheAmirivision:
FirasAlodareiterated that the fact that H.H. the Amir chairs the Foundation’s Board of Directors has given impetus to the development of visions that underpin the Foundation course of action since its establishment and has given full force and momentum to the Foundation. We at the Foundation strive to follow on firm steps to achieve these visions inspired by the guidance of H.H. Alodaadded that H.H. is keen to continue his support and to ensure the development of the Foundation’s activities thus contributing to achieving its objectives to propel the country forward so that Kuwait will rank high in scientific innovation and sustainable development.
Newspaper article 5-9-2016