Will Sovereign Wealth Funds Rule the World?

By David R Francis columnist | The Christian Science Monitor, November 26, 2007 | Go to article overview

Will Sovereign Wealth Funds Rule the World?


David R Francis columnist, The Christian Science Monitor


Sovereign Wealth Funds are huge, scarily big.

Though unknown to most Americans, these -government-owned funds have been getting lots of attention in the financial press as well as among the world's top central bankers and finance ministers. The Senate Banking Committee heard lengthy testimony on them earlier this month.

These funds are mostly the product of accumulated US dollars by China, with its massive trade surplus, and by oil-exporting countries reaping generous profits from oil at $90 plus per barrel.

How big are they? Estimates vary. The 28 nations with Sovereign Wealth Funds (SWFs) have, in total, assets of $2.1 trillion, figures Edwin Truman, an expert at the Peterson Institute for International Economics in Washington.

By 2011 or 2012, SWFs could have piled up $7 trillion to $8 trillion, guesses Harvard University economist Kenneth Rogoff, a former chief economist for the International Monetary Fund (IMF).

SWF assets could be $3 trillion now and $10 trillion by 2012, reckons Simon Johnson, IMF research director.

Whatever their size, the huge piles of SWF money ready to be deployed across borders make some financiers edgy.

"Our nation is not doing well in the global economic competition," Patrick Mulloy, Washington representative of the Alfred P. Sloan Foundation, told the Senate Banking Committee Nov. 14. He cited concerns that SWF money will be used not just for economic reasons but also for political and strategic purposes.

Securities and Exchange Commission Chairman Christopher Cox said in a speech at Harvard Oct. 24 that "the fundamental question presented by state-owned public companies and sovereign wealth funds does not so much concern the advisability of foreign ownership, but rather of government ownership." These financial and business entities could act in the interests of foreign governments, not necessarily the interests of the United States.

Warren Buffett, the famed billionaire investor, has worried that as long as the US has major foreign trade deficits (some $700 billion a year), it has to "give away a little part of the country" each year. The US could end up with a "sharecropper economy," where Americans largely work for foreign-owned firms.

Mr. Rogoff isn't so bothered by SWFs. He figures SWFs will do "more good than bad" in an increasingly globalized world economy. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Will Sovereign Wealth Funds Rule the World?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.