Commentary
In an interview, Marc Lynch discusses his new book decrying the post-1990 U.S.-dominated order in the Middle East.
Michael Young
REQUIRED IMAGE
Paper
When Money Talks: Arab Sovereign Wealth Funds in the Global Public Policy Discourse
The financial interdependence that sovereign wealth funds (SWFs) created between the West and the Arab world could help stabilize multilateral relations and promote economic development and political stability in the Middle East.
By Sven Behrendt
Published on Oct 15, 2008
The financial interdependence that sovereign wealth funds (SWFs) created between the West and the Arab world could help stabilize multilateral relations and promote economic development and political stability in the Middle East, concludes a new paper from the Carnegie Middle East Center.
Sven Behrendt studies the rise of Arab SWFs, assesses their investment strategy, and evaluates the policies of Arab investors and Western nations.
He also analyses the political implications of policy initiatives, such as the International Working Group of Sovereign Wealth Funds convened by the IMF, which agreed to new voluntary principles and investment practices in Washington last Saturday.
Key conclusions:
- An international framework between investing and recipients nations is needed and should reflect the changing nature of the global market. A fragmented system of national policies is inefficient and in no one’s interest.
- Arab investment managers need to adjust their strategies and take broader responsibility for the stability of the global financial markets. They can no longer play the role of quiet investors.
- Arab public opinion, media, and civil society should take an interest in their countries’ SWFs and demand a more transparent accounting of how the funds are being invested.
- Western governments should acknowledge the increased bargaining power of the Gulf countries and reach out in a constructive manner. They must also avoid policy decisions based on misplaced fear of foreign domination and populist sentiments.
Behrendt cautions:
“It is vital that the International Working Group’s work acquires a high degree of political legitimacy, anticipating the tremendous growth of SWFs in the mid-term future, further straining any new financial markets regime. Otherwise states will revert to national legislation in regard to regulating SWFs. The outcomes of these policy processes risk to largely be a function of the domestic discourse between pragmatists and populists in the Western countries.”
Sven Behrendt is a visiting scholar at the Carnegie Middle East Center. He is an expert in global policy issues, international negotiations, corporate strategy, and diplomacy. Prior to his appointment at Carnegie, he served in various management positions at the World Economic Forum and the Bertelsmann Group on Policy Research. He is a regular commentator on television and in the press on corporate strategy and globalization.
About the Author
Sven Behrendt
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Malcolm H. Kerr Carnegie Middle East Center
- Corrupted by Absolute Power
- Why Does the Middle East Suffer “Forever Wars”?Commentary
Because perpetual conflict enhances control, offers economic benefits, and allows leaders to ignore popular preferences.
Angie Omar
- Climate Worsens the Distress of Yemen’s MuhammasheenCommentary
The community already suffers social discrimination, so addressing inequalities requires sustained interventions.
Musaed Aklan , Mohammad Al-Saidi
- A Military Balance Sheet in the U.S. and Israeli War With IranCommentary
In an interview, Jim Lamson discusses the ongoing regional conflict and sees an unclear picture when it comes to winners and losers.
Michael Young
- Kuwait’s Bidun in the Face of Climate Change are Invisible, yet ExposedArticle
Mitigating the repercussions of climate change in Kuwait is crucial for lessening economic disparities and achieving social justice.
Courtney Freer
