International Law

Sovereign Wealth Funds & Income Inequality

By Stan

It seems reasonable that only citizens should be the beneficiaries of any payout from the SWF as the oil belongs to citizens of all generations.

Interesting piece on Sovereign Wealth Funds (mostly deals with oil producing nations) in Asia Times. Looking at the huge inflow of capital to these countries and tracking income inequality and distribution of wealth is certainly a relevant and interesting topic.

However, the big issue these days with SWFs is the reaction of countries into which they are trying to invest (e.g. the United States). Taking the Asia Times article slightly further, should the U.S. make value judgments and restrict investment because dividends from these funds are not being distributed fairly to their citizenry?

That’s a very scary sort of judgment that I hope never comes to pass. Leave the normative issues to politics, diplomacy, and soft power. Deal with investment matters in a simple way - let investors buy what they want and only scrutinize based on well established frameworks (i.e. anti-trust).

I’m still pissed off about Dubai Ports, Unocal, 3Com. This crap has got to stop.

Full post as published by China Hearsay on May 23, 2008 (boomark / email).