Five problems—and solutions—to make it actually work as a tool of great power competition.
Afreen Akhter
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Greater transparency about their holdings and investment strategies would help Sovereign Wealth Funds to overcome concerns and to play a role in resolving the economic crisis.
BEIRUT, Feb 24—Despite the severity of the global economic crisis, many governments are still nervous about accepting investment by Arab Sovereign Wealth Funds (SWFs) despite their potential to provide urgently needed liquidity. Greater transparency about their holdings and investment strategies would help SWFs to overcome these concerns and to play a role in resolving the economic crisis, concludes a new policy outlook from the Carnegie Middle East Center.
Key conclusions:
Sven Behrendt, the author, concludes:
“The uncertainty surrounding Arab SWFs has increased the political and regulatory risk premium for all sovereign foreign investors. It has also complicated efforts to address the global financial crisis. It is therefore in the individual interest of SWFs as well as in the interest of the global community at large to shift gears on the issues of transparency and disclosure.”
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NOTES
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.
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