Sovereign wealth funds (SWFs) represent a large and growing pool of savings. An increasing number of these funds are owned by natural resource, exporting countries and have a variety of objectives, including intergenerational equity and macroeconomic stabilization. Traditionally, these funds have invested in external assets, especially securities traded in major markets. But the persistent infrastructure financing gap in developing countries has motivated some governments to encourage their SWFs to invest domestically. Is it appropriate to use SWFs to finance long-term development needs? Does it matter whether such investments are domestic or foreign-held assets? This note considers these issues, particularly the controversial question of using SWFs to finance domestic projects, motivated partly by SWFs' perceived importance for development.
Details
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Author
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Document Date
2014/01/01
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Document Type
Brief
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Report Number
84016
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2014/01/15
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Disclosure Status
Disclosed
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Doc Name
Sovereign wealth funds and domestic investment in resource-rich countries : love me, or love me not?
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Keywords
Poverty Reduction & Economic Management;business development bank;financial return;domestic investment;principles of corporate governance;social rate of return;innovative public-private partnership;foreign exchange reserve management;private investor;public investment program;resource-rich country;quality of public;long-term investment horizons;global financial crisis;international financial corporation;impact of investments;operations and maintenance;dutch disease;good corporate governance;foreign currency reserve;return on investment;international financial institution;budget process;social return;foreign asset;social externalities;securities trade;external asset;macroeconomic stabilization;
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Citation
Gelb,Alan Harold Halland,Havard Tordo,Silvana
Sovereign wealth funds and domestic investment in resource-rich countries : love me, or love me not (English). Economic premise,no. 133 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/591431468327388337/Sovereign-wealth-funds-and-domestic-investment-in-resource-rich-countries-love-me-or-love-me-not