|Recently the media has highlighted raising controversy surrounding the activities of Sovereign Wealth Funds (SWFs). Potential investments by the Chinese SWF in U.S. assets have been blocked, supposedly due to concerns over national security. People fear politically motivated investments and accuse SWFs of insufficient transparency in their actions.
While these concerns are valid (and very applicable to some players in the market), condemning SWFs all together would be fatal for some countries that desperately need them to support and stabilize their economy. Think about this: Why do commodity-exporting countries succumb to the so-called resource curse? Why is it that despite all the resource abundance, countries like Nigeria have not been able to capitalize on this? The perplexing question has a simple answer. It is poor, or even, wicked revenue management. That's why a sovereign wealth fund (SWF) should be the tools of choice to overcome the resource curse...............................................Full Article: Source