From Financialization to Vulture Developmentalism : South-North Strategic Sovereign Wealth Fund Investment and the Politics of the ‘Quadruple Bottom Line’

Although sovereign wealth funds (SWFs) are invariably profit-seeking in orientation, a large proportion pursue a “double bottom line” wherein investments are simultaneously used to advance so-called “strategic” national developmental objectives. This paper seeks to dissect the potential and limitations of South-North strategic SWF investment as a tool for catalyzing technological upgrading in the developing world. These investments create globe-spanning company networks that are hybrids of state and private capital in multiple economies, within which advanced economy host states can play either a facilitative or an obstructive gatekeeper role. Consequently, it is necessary to understand strategic SWF-led development in terms of not only the “double bottom line” of SWFs and their sponsoring states, but also a second double-bottom line encompassing the interests of various actors in host economies. In other words, the combined home-host politics of strategic SWF investment must be described in terms of a “quadruple bottom line.” Whereas the SWF home state side of this quadruple bottom line can be understood as an adaptive response to the external pressures of financialized neoliberal globalization on developing economies, I argue that the host side has been predominantly shaped by the efforts of public and private actors within developed economies to find a path of least resistance around domestic political and economic deadlocks. As illustrated here through the case of Abu Dhabi, the manner in which this has occurred has simultaneously enabled and constrained the attempts of states in the developing world to use South-North strategic SWF-investment to accelerate their domestic economic development