Sovereign wealth funds in the Gulf - an assessment

Since the early 2000s the number and size of sovereign wealth funds (SWF) have grown substantially. A large proportion of these government-owned and government-run funds were created by oil producing countries in the Gulf region and elsewhere. These funds have made some high-profile investments in the United States and Europe. Despite their crucial role in helping to overcome global economic recession, some policy-makers are concerned about the surge of SWF's role in the international economic system. This study examines the rise of SWF from the Gulf region and the role they play in their home countries and in the recipient markets. The paper analyzes the argument for and against these funds. I argue that SWF investments have been largely driven by economic considerations and have served the interests of both holding and receiving economies. Furthermore, SWFs have contributed to a growing interdependence between the two sides. In short, facilitating foreign investments, including those from SWFs, is a win-win strategy.