Do Sovereign Wealth Funds Pose Threats to Recipient Nations?
Policy makers and analysts have been watching the recent rise of SWFs with considerable unease. There are concerns that an investment by a SWF might be used a backdoor for the government who owns or manages it, to influence the economy or politics of the country the SWF is investing in. Behrendt listed some of the arguments against SWFs: • SWFs have been said to challenge the autonomy of recipient economies to make foreign policy decisions, provide investors with a significant geopolitical tool, and challenge national security. • SWFs have been said to erode the governance standards of the companies that they invest in, and threaten the competitiveness of recipient countries by using their corporate power to steal knowledge and technology to investor economies. • There funds have also been said to potentially challenge the global capitalist system itself, by using large investments in companies or other financial instruments to destabilize another nation’s economy for political motives
Related Questions
- Which country in the Middle East seized the sovereign territory of other nations by military force and continues to occupy it in defiance of United Nations Security Council resolutions?
- How do you see the growth of sovereign wealth funds influencing economic interdependence among countries down the road?
- Are sovereign wealth funds "white knights"?
