| Fight for control of Libyan Investment Authority highlights need for greater governance over giant sovereign wealth funds.Back in 1974, Fortune magazine described the oil boom in the Middle East as the biggest re-distribution of wealth in history. Across the Arab world, people who had spent centuries living in abject poverty were suddenly blessed with oil riches beyond their wildest dreams.
Foreign currency earnings began to flow into the region and - to mop up this flood of capital - governments set up sovereign wealth funds, or SWFs. These funds were, in principle, intended to act as banks of last resort for oil producers in the region by investing petro-dollars overseas during periods of high prices. Were revenue from oil sales to decline, then these investments could be sold to provide hard currency at short notice to support economic growth...............................................Full Article: Source
|