Publication:
Sovereign Wealth Funds and Long-Term Development Finance : Risks and Opportunities

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dc.contributor.authorGelb, Alan
dc.contributor.authorTordo, Silvana
dc.contributor.authorHalland, Havard
dc.contributor.authorArfaa, Noora
dc.contributor.authorSmith, Gregory
dc.date.accessioned2014-03-18T20:39:29Z
dc.date.available2014-03-18T20:39:29Z
dc.date.issued2014-02
dc.description.abstractSovereign wealth funds 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 sovereign wealth funds to invest domestically. This paper proposes some basic elements of a conceptual framework to create a system of checks and balances to help ensure that the sovereign wealth funds do not undermine macroeconomic management or become a vehicle for politically driven "investments." First, the risks and opportunities of domestic investment by sovereign wealth funds are analyzed. Central issues are the relationship of sovereign wealth fund financing to the budget process and to the procurement systems of sector ministries, as well as the establishment of appropriate benchmarks and safeguards to ensure the integrity of investment decisions. The paper argues that a well-governed sovereign wealth fund, with a sound mandate and professional management and staffing, can possibly improve the quality of the public investment program. But its mandate should not duplicate that of other government institutions with investment mandates, such as the budget, the national development bank, the investment authority, and state-owned enterprises. Establishing rules on the type of investment (for example, commercial and/or quasi-commercial) and its modalities (for example, no controlling stakes, leveraging private investment) is one way to ensure separation between the activities of the sovereign wealth fund and those of other institutions. The critical issue remains that of limiting the sovereign wealth fund's investment scope to that appropriate for a wealth fund. If investments that generate quasi-market returns are permitted, the size of the home bias should be clearly stipulated and these investments should be reported separately.en
dc.identifierhttp://documents.worldbank.org/curated/en/2014/02/18930592/sovereign-wealth-funds-long-term-development-finance-risks-opportunities
dc.identifier.doi10.1596/1813-9450-6776
dc.identifier.urihttps://hdl.handle.net/10986/17313
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 6776
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING
dc.subjectAFFILIATED ORGANIZATIONS
dc.subjectALTERNATIVE ASSET
dc.subjectALTERNATIVE INVESTMENT
dc.subjectASSET CLASS
dc.subjectASSET CLASSES
dc.subjectASSET MANAGEMENT
dc.subjectASSET MANAGERS
dc.subjectAUDIT COMMITTEE
dc.subjectAUDIT COMMITTEES
dc.subjectBANK POLICY
dc.subjectBONDS
dc.subjectBORROWING COSTS
dc.subjectBUDGETING
dc.subjectCAPACITY CONSTRAINTS
dc.subjectCAPITAL INVESTMENTS
dc.subjectCAPITAL MARKET
dc.subjectCAPITAL MARKETS
dc.subjectCAPITAL STOCK
dc.subjectCAPITAL STOCKS
dc.subjectCENTRAL BANK
dc.subjectCHECKS
dc.subjectCOMMERCIAL BASIS
dc.subjectCOMMERCIAL INVESTMENT
dc.subjectCOMMERCIAL INVESTMENTS
dc.subjectCOMMERCIAL LOANS
dc.subjectCOMMERCIAL TERMS
dc.subjectCOMPANY LAW
dc.subjectCONFLICT OF INTERESTS
dc.subjectCONFLICTS OF INTEREST
dc.subjectCONTINGENT LIABILITIES
dc.subjectCORPORATE GOVERNANCE
dc.subjectCREDIBILITY
dc.subjectDEBT MANAGEMENT
dc.subjectDEBTS
dc.subjectDEGREE OF RISK
dc.subjectDERIVATIVES
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPMENT BANK
dc.subjectDEVELOPMENT FINANCE
dc.subjectDEVELOPMENT FINANCING
dc.subjectDIRECT INVESTMENT
dc.subjectDIRECT INVESTMENTS
dc.subjectDISBURSEMENTS
dc.subjectDIVESTMENT
dc.subjectDOMESTIC CAPITAL
dc.subjectDOMESTIC INVESTMENT
dc.subjectDOMESTIC MARKET
dc.subjectDOMESTIC STOCK EXCHANGE
dc.subjectDUE DILIGENCE
dc.subjectECONOMIC DEVELOPMENT
dc.subjectEFFICIENT PORTFOLIOS
dc.subjectEMERGING MARKETS
dc.subjectEQUITIES
dc.subjectEQUITY INVESTMENTS
dc.subjectEQUITY MARKET
dc.subjectEXCHANGE RATE
dc.subjectEXPECTED RETURNS
dc.subjectEXPENDITURE
dc.subjectEXPENDITURES
dc.subjectEXPORTERS
dc.subjectEXTERNAL ASSETS
dc.subjectFINANCIAL ASSETS
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL INSTRUMENTS
dc.subjectFINANCIAL MANAGEMENT
dc.subjectFINANCIAL MARKET
dc.subjectFINANCIAL PERFORMANCE
dc.subjectFINANCIAL STATEMENTS
dc.subjectFINANCIAL SUPPORT
dc.subjectFINANCIAL SUSTAINABILITY
dc.subjectFISCAL DEFICIT
dc.subjectFISCAL POLICY
dc.subjectFIXED INCOME
dc.subjectFIXED INCOME PORTFOLIO
dc.subjectFLOW OF INVESTMENT
dc.subjectFOREIGN EXCHANGE
dc.subjectFOREIGN EXCHANGE RESERVE
dc.subjectFOREIGN INVESTORS
dc.subjectFOREIGN NATIONALS
dc.subjectFRAUD
dc.subjectGOVERNANCE ISSUES
dc.subjectGOVERNMENT OWNERSHIP
dc.subjectHEDGE FUNDS
dc.subjectHOLDING
dc.subjectHOLDINGS
dc.subjectHOST COUNTRY
dc.subjectILLIQUIDITY
dc.subjectINCOME FLOW
dc.subjectINFLATION
dc.subjectINFRASTRUCTURE FINANCING
dc.subjectINFRASTRUCTURE INVESTMENT
dc.subjectINFRASTRUCTURE INVESTMENTS
dc.subjectINSTITUTIONAL INVESTORS
dc.subjectINTERNAL AUDIT
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL FINANCE
dc.subjectINTERNATIONAL INVESTMENT
dc.subjectINTERNATIONAL INVESTORS
dc.subjectINTERNATIONAL PORTFOLIOS
dc.subjectINTERNATIONAL STANDARDS
dc.subjectINVESTABLE FUNDS
dc.subjectINVESTING
dc.subjectINVESTMENT ACTIVITIES
dc.subjectINVESTMENT BANKS
dc.subjectINVESTMENT CAPITAL
dc.subjectINVESTMENT CORPORATION
dc.subjectINVESTMENT CRITERIA
dc.subjectINVESTMENT DECISION
dc.subjectINVESTMENT DECISIONS
dc.subjectINVESTMENT FLOWS
dc.subjectINVESTMENT FUNCTION
dc.subjectINVESTMENT FUND
dc.subjectINVESTMENT FUNDING
dc.subjectINVESTMENT HORIZON
dc.subjectINVESTMENT HORIZONS
dc.subjectINVESTMENT INSTITUTIONS
dc.subjectINVESTMENT MANAGEMENT
dc.subjectINVESTMENT NEEDS
dc.subjectINVESTMENT OPPORTUNITIES
dc.subjectINVESTMENT POLICIES
dc.subjectINVESTMENT POLICY
dc.subjectINVESTMENT PORTFOLIO
dc.subjectINVESTMENT PROCEDURES
dc.subjectINVESTMENT PROCESS
dc.subjectINVESTMENT PROGRAMS
dc.subjectINVESTMENT PROJECTS
dc.subjectINVESTMENT RETURN
dc.subjectINVESTMENT RETURNS
dc.subjectINVESTMENT SERVICES
dc.subjectINVESTMENT SPENDING
dc.subjectINVESTMENT STRATEGIES
dc.subjectINVESTMENT VEHICLE
dc.subjectJOINT STOCK COMPANY
dc.subjectLENDERS
dc.subjectLIABILITY
dc.subjectLIQUIDITY
dc.subjectLOCAL ECONOMY
dc.subjectLONG TERM INVESTMENT
dc.subjectLONG-TERM INVESTMENT
dc.subjectLONG-TERM LIABILITIES
dc.subjectLOW RISK INVESTMENTS
dc.subjectMACROECONOMIC FLUCTUATIONS
dc.subjectMACROECONOMIC MANAGEMENT
dc.subjectMACROECONOMIC POLICY
dc.subjectMACROECONOMIC STABILIZATION
dc.subjectMARKET CONDITIONS
dc.subjectMARKET DISCIPLINE
dc.subjectMARKET PRICE
dc.subjectMARKET REGULATOR
dc.subjectMARKET RETURN
dc.subjectMARKET RETURNS
dc.subjectMINORITY SHAREHOLDERS
dc.subjectMULTIPLIER EFFECT
dc.subjectOIL PRICES
dc.subjectOPERATIONAL INDEPENDENCE
dc.subjectPENSION
dc.subjectPENSION FUND
dc.subjectPENSION FUNDS
dc.subjectPENSIONS
dc.subjectPOLITICAL ECONOMY
dc.subjectPOLITICAL RISK
dc.subjectPORTFOLIO
dc.subjectPORTFOLIO MANAGEMENT
dc.subjectPORTFOLIOS
dc.subjectPRICE MOVEMENTS
dc.subjectPRIVATE CAPITAL
dc.subjectPRIVATE CREDIT
dc.subjectPRIVATE EQUITY
dc.subjectPRIVATE INVESTMENT
dc.subjectPRIVATE INVESTORS
dc.subjectPRIVATE PARTIES
dc.subjectPRIVATE RETURNS
dc.subjectPRODUCTIVE INVESTMENT
dc.subjectPROFITABILITY
dc.subjectPUBLIC DEBT
dc.subjectPUBLIC DISCLOSURE
dc.subjectPUBLIC FINANCE
dc.subjectPUBLIC FUNDS
dc.subjectPUBLIC INVESTMENT
dc.subjectPUBLIC INVESTMENT PROGRAM
dc.subjectPUBLIC INVESTMENT PROGRAMS
dc.subjectPUBLIC INVESTMENTS
dc.subjectPUBLIC SPENDING
dc.subjectRATE OF RETURN
dc.subjectREAL EXCHANGE RATE
dc.subjectREAL PROPERTY
dc.subjectREGULATORY FRAMEWORKS
dc.subjectRESERVE
dc.subjectRESERVE FUND
dc.subjectRESERVES
dc.subjectRETURN
dc.subjectRETURN ON INVESTMENT
dc.subjectRISK ADJUSTED RATE
dc.subjectRISK DIVERSIFICATION
dc.subjectRISK MANAGEMENT
dc.subjectSECURITIES
dc.subjectSHAREHOLDER
dc.subjectSTANDARD ASSET
dc.subjectSTATE BANK
dc.subjectSTATE OWNED ENTERPRISES
dc.subjectTRADE UNION
dc.subjectTRADING
dc.subjectTRANSACTION
dc.subjectTRANSPARENCY
dc.subjectTREASURY
dc.subjectTRUSTEE
dc.subjectTRUSTEES
dc.subjectVALUATION
dc.titleSovereign Wealth Funds and Long-Term Development Finance : Risks and Opportunitiesen
dspace.entity.typePublication
okr.crossref.titleSovereign Wealth Funds and Long-Term Development Finance: Risks and Opportunities
okr.date.disclosure2014-02-01
okr.date.doiregistration2025-04-10T10:22:07.221343Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2014/02/18930592/sovereign-wealth-funds-long-term-development-finance-risks-opportunities
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.globalpracticeTrade and Competitiveness
okr.guid788391468155724377
okr.identifier.doi10.1596/1813-9450-6776
okr.identifier.externaldocumentum000158349_20140211115309
okr.identifier.internaldocumentum18930592
okr.identifier.reportWPS6776
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/02/11/000158349_20140211115309/Rendered/PDF/WPS6776.pdfen
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicMacroeconomics and Economic Growth::Investment and Investment Climate
okr.topicPrivate Sector Development::Emerging Markets
okr.topicFinance and Financial Sector Development::Non Bank Financial Institutions
okr.topicFinance and Financial Sector Development::Debt Markets
okr.unitPublic Sector Governance Unit, Poverty Reduction and Economic Management Network; and Oil, Gas and Mining Unit, Sustainable Development Network
okr.volume1 of 1
relation.isAuthorOfPublicationf29828ae-9fb1-59f8-a8b1-9e9275acebd2
relation.isAuthorOfPublication8c27f9ff-0faa-5efd-b722-9b63c0b881ec
relation.isAuthorOfPublication.latestForDiscovery8c27f9ff-0faa-5efd-b722-9b63c0b881ec
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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