Commodity Based Sovereign Wealth Funds: An Alternative Path to Economic Development
Natural resource producing countries struggle with issues about how to make use of their natural resources properly, allocate the funds from these resources and how to ensure continuity of these resources and their effects through the years. Commodity based sovereign wealth funds offer a channel through which these can be achieved. This dissertation studies these funds with respect to how they can be used to finance development in resource rich countries. Each chapter examines natural resource funded sovereign wealth funds called commodity based sovereign wealth funds (CBSWF), from different angles. This includes analyses of what these funds are, how they are currently used, the dangers in the current savings-‐like investment strategy and then proposes new real investment strategies that can encourage growth for these countries. The aim of these analyses is to suggest these funds as an alternative path towards growth and development in natural resource owning economies. To achieve this, we look at the pre-‐ and post-‐ CBSWF era of some CBSWF owning countries except for Iraq, Iran and Libya, which have recently experienced wars that have disrupted these economies and countries. Some of the countries being studied have recently adopted these funds or have not done anything with these funds. Thus, it is difficult to analyze the effects of these funds in these countries. We compare these countries’ Gross Development Product (GDP) and their Human Development Indicators (HDI). We analyze these data before and after these funds were adopted in these countries to see how effective these funds have been with respect to economic growth and development. We take a look at the failures of the current savings led investment strategy of some countries that have adopted these funds. Then we propose alternative real sector development financing that ensures sustainable growth in these countries. This is done in order to advocate for a real investment led growth in natural resource owning countries.
Table of Contents
Introduction -- How these funds are spent -- Financialization and risks -- Sustainable development policy options -- Vision 2030 and development paths in Sub-Saharan Africa -- Conclusion and directions for future research