Sovereign funds : a threat or an opportunity ?

• Patrice HIDDINGA
  Strategic analyst, banking and finance
  
• Christophe STALLA-BOURDILLON
  International consultant
  Professor of economics
  

Summary

Sovereign funds (or sovereign wealth funds) were created more than fifty years ago, but recently they have been considered a threat by Western countries. The sharp increase in foreign exchange reserves, largely linked to the production of oil by countries in the Gulf and Asian trade surpluses, has enabled these countries to exert a growing worldwide influence, especially because of their transnational investments via their sovereign funds. At the same time, globalisation has generated wealth based on trade between states, and both reduced their sovereignty and made them interdependent. Subsequently, we are now witnessing a return of these states to the role of economic players in their own right, whereas, according to models of capitalism and free trade, they ought to limit themselves to the role of arbitrage. Patrice Hiddinga and Christophe Stalla-Bourdillon discuss the foundations and paradoxes of this new global phenomenon and question its future.

Summary translated from French by Rachel MARLIN.

• The entire article was written by Jacques BERTHIER.

To obtain this article, you can :

• download it for free in French (PDF help) or contact ecopar@paris.ensmp.fr (Reference VA060209).

The entire article appears in French in the Journal de l'École de Paris du management N° 78.