Sovereign wealth funds and their role in reviving economies
Pratha News Agency 101 11-12 2020
Dr. Ali Al-Ammar ||
What are sovereign wealth funds?
Economically, they are huge investment entities that invest in huge amounts estimated in trillions of dollars, which are costly but useful, as well as take care of managing the wealth and surplus financial reserves of countries and their means of development,
and they consist of various assets such as real estate, stocks, bonds and other investments, in other words it is the longest arm of investment, especially for countries with interests Larger fiscal surpluses.
Historically, the idea of establishing these sovereign funds goes back to many regions of the world, including our Arab region, as Kuwait is one of the first countries that thought and invested in these funds through the General Investment Authority, which was established in 1953 to invest in large oil financial surpluses.
Digitally .... The UAE ranked third globally, with total assets amounting to $1097 billion through 5 funds distributed by $579.62 billion for the Abu Dhabi Investment Authority, $239.4 billion for the Government Investment Corporation of Dubai, $232.14 billion for Mubadala Investment and $45 billion for the Emirates Foundation For investment, which is the only wealth fund of the federal government, and finally $794 million to the Sharjah Asset Management Holding Fund.
Internationally ... China and Norway come before the UAE in the first and second places in the world...
And they are economies that rely on these funds a lot for their rapid economic recovery from the repercussions of Corona and other crises.
China alone has the upper hand, according to the Sovereign Wealth Institute SWFI
And for his latest report that talks about the existence of 93 sovereign funds in the world,
China topped it with the volume of assets amounting to 1.683 trillion dollars through 3 major funds, which are the China Investment Fund, Saif Investment Company, and the Chinese Social Security Fund with 940.6, 417 and 324.9 billion dollars respectively
Norway came second with assets amounting to 1186.67 trillion dollars financed through one fund, which is the largest and largest in the world, which is the government retirement fund!!!!!
In addition to the above ... We list below the most important sovereign funds in the Arab and international world
Kuwait is fourth in the world, with $553.7 billion
- The investment portfolio of the Monetary Agency - Hong Kong $528.1 billion
GIC Singapore sovereign fund with $440 billion
- TASMIC Holding Fund - Singapore $375.4 billion.
The Saudi Sovereign Fund (Saudi Investment Fund) $360 billion.
- While the Qatar Investment Authority retreated, a noticeable decline reached the 12th place in the world, with assets of 295.2 billion dsars, after it was before the COVID 19 pandemic, with a total reserve of 328 billion dollars.
At the level of the Gulf, we find 6 countries, with the exception of Iraq, possessing sovereign assets amounting to about 2319 billion dollars distributed among 10 sovereign funds.
The Emirates alone owns 47% of them.
As for economies like Bahrain and Oman, they possess sovereign assets ranging between 16.6 and 14.2 billion dollars, which in total represent the Gulf region. A safety valve for a post-pandemic era or a chronic deterioration in oil prices.
What comes after the pandemic?
The injection of sovereign wealth funds into the Gulf countries is expected to be precisely to ward off some of the risks and repercussions of the post-COVID 19
It has already pumped, or is still pumping, 300 billion dollars for the same purpose.
Also, oil exporters will be in dire need to find new sources and incomes to restore growth opportunities to their previous era, and to reclaim what has been spent from these funds, and even develop them.
Iraq .... Where is this from?
We find that the countries and economies most affected by the Corona pandemic and the oil crisis are those countries that lack the presence of large sovereign assets and suffer two complex problems, the most important of which is rentierism and lack of anticipation for the future....
As initial estimates indicate that oil exporters in the Middle East and North Africa will face a sharp decline in their financial revenues, which may reach negatively $226 billion, according to the IE Center for Change Governance data.
Especially among those economies, the economy of Iraq, as it has the least sovereign assets of not more than one billion dollars only, and it comes after Egypt with a few thousand dollars, which are preceded by one or two ranks, specifically that it has only 900 million dollars only....
with the fragility of an economic situation and clear slack and politics Economical, you need a lot of effort and time to fix it....