SWF's function signficantly in emerginf markets because the mass of wealth accumulated can diversify and expand upon sectors, which in turn protects the economy during its grwoth periods and strengthens their respective nations in the long term. Examples include stabilizing banks durig crisis and shaping future industries as a whole.
One of the most well known SWF's is Saudi Arabia's Public Investment Fund (PIF). Sporting events amoungst other sectors have brought in over 800 billion of assets BUT are not even close to the 1.5 trillion SWF of Norway or the 1.2 trillion and 1 trillion coming from China and Hong Kong respectively.
I find it quite interesting that sporting events are being invested in. This made me wonder how France will financially/economically gain from hosting the 2024 Summer Olympics in Paris.
ReplyDeleteThe article states, that “Foreign SWFs can provide crucial infrastructure projects to help drive forward an economy.” This type of funding may work to develop third-world economies and help foster their growth and help their GDPs.
ReplyDeleteBefore reading this article, I had no idea what SFW's were even though they have been recently changing how countires invest. As a student studying business with an interest in finance,I think it's important to understand how SFW works and pay attention to what countries are investing in to forecast what emerging markets will be bring the best return in the future. What Im still curious about is what how the US utilizes SFW and what they are investing in.
ReplyDeleteThis has me asking many different questions. The first being, do citizens have any say in what their government invests in? I have never heard of anyone voting for a SWF, so I would assume not. After all, it is their tax money the government is using.
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