Yes its back to one of my favorite hobbyhorse the future curse of Privatization upon the Worlds natural resources and ever thing else, it seems by Sovereign Wealth Funds. (SWFs)
Should you be concerned about their activities?
Sovereign wealth funds (SWFs) have been quietly accumulating, investing and spending excess reserves since the first SWF, the Kuwait Investment Authority, was established in 1953.
While none of these funds disclose the extent of their assets, they are widely perceived as ranking among the world’s richest institutional investors, not to mention the most secretive.
According to estimates from the Sovereign Wealth Fund Institute, Saudi Arabia’s SAMA Foreign Holdings’ assets total $675.9bn, Abu Dhabi Investment Authority’s (ADIA) $627bn, Kuwait Investment Authority’s (KIA) $386bn and Qatar Investment Authority’s (QIA) $170bn.
Yes we should all be concerned.
The emerging map of the twenty-first century is that global capitalism favors the holders of financial assets over domestic institutions.
What is called the Microeconomics circumstances of the Western Countries is not helping. It is causing foreign governments to expand their SWFs.
Sovereign Wealth Funds are replacing the International Monetary Fund (IMF) as the lender of the last resort.
Recently in the financial crises they bailed out many a countries Banks.
Markets are supposed to be self-regulating. Their efficiency is built on a carefully designed institutional infrastructures which is being eroded or undercut by the financial clot of SWFs (East Asia, China SWFs)
It is time to call their very purpose into question.
Why? Because they are managed by money people how are in the business of short-term investment, driven by speculative activities.
(When a quick kill for profit is at the forefront of investment, long-term values become blurred.)
They will if not caped become an ever increasing de-stabilizing factor in the global financial Systems.
They are nothing other than fully operational investment vehicles that are not contributing anything to solving any of the World Problems, such as climate change, poverty, inequality, wealth distribution, pollution, water deprivation.
Should they be allowed to invest willy-niley around the world without totally transparent? No. Poor countries natural resources are at their mercy.
Although SWFs must be cognizant of possible retaliatory actions, such as asset freezes and/or asset confiscations, that can be taken against their investments for things such as political disagreements or court rulings that hold SWFs responsible for the actions of their host country’s citizens. They have a narrow mission, to acquire Assets to generate funds for the countries with SWFs.
“We need to have a lot more control over what they do and how they do it.”
A whole lot of questions are ignored these days when it come to making Profit. Our concern should be about who is behaving in ways that have adverse effects on our societies.
If you don’t believe me why not ask Mr Cameron who recently had a chat with the Chines president Mr Xi Jinping. I am sure what ever business he managed to squeeze out of him in exchange for an Audience with the Queen will be financed by China Sovereign Funds. High speed rail to Peking.
A New Form of Capitalism that is shifting the balance of power globally.