Sovereign wealth funds (SWFs) in their new guise of established market players can contribute to the economic recovery strategies of the developed economies, considers Dr. Alexander Mirtchev.
Soaring debt, anemic growth, intransigent unemployment, social unrest…these are the fundamental challenges that America could be facing as Congress gears up to consider President Obama’s new jobs plan. One proposal that is unlikely to surface during the debate is a greater openness to sovereign wealth funds. Why? Among others, SWFs’ past ‘trophy asset’ sprees have not played well in the U.S., reinforcing concerns about the balance between their political and economic objectives. SWFs are, after all, the investment arms of resource-rich or export-oriented countries and if they choose to use these funds more to achieve political goals rather than for pure business purposes, they are seen in some quarters as undermining confidence and distorting global capital flows. (Press Release)