Sovereign Wealth Funds - A Work Agenda

Policy Papers ◽  
2008 ◽  
Vol 2008 (8) ◽  
Author(s):  
Keyword(s):  
Oil Prices ◽  
Abu Dhabi ◽  
International Capital ◽  
Asian Countries ◽  
Investment Funds ◽  
Sovereign Wealth Funds ◽  
International Capital Markets ◽  
Rapid Accumulation ◽  
Set Up

Sovereign Wealth Funds (SWFs) are becoming increasingly important in the international monetary and financial system, attracting growing attention. SWFs are government-owned investment funds, set up for a variety of macroeconomic purposes. They are commonly funded by the transfer of foreign exchange assets that are invested long term, overseas. SWFs are not new, and some of the longer-established funds—for example those of Kuwait, Abu Dhabi, and Singapore—have existed for decades. However, high oil prices, financial globalization, and sustained, large global imbalances have resulted in the rapid accumulation of foreign assets particularly by oil exporters and several Asian countries. As a result, the number and size of SWFs are rising fast and their presence in international capital markets is becoming more prominent.

Economic stress drains CIS sovereign wealth funds

2015 ◽  
Keyword(s):  
Pension System ◽  
Economic Stress ◽  
International Capital ◽  
Sovereign Wealth Funds ◽  
Content Type ◽  
International Capital Markets ◽  
The Face ◽  
National Welfare ◽  
The Impact ◽  
Welfare Fund

Significance Concern about the need to preserve one of the SWFs to support the pension system is probably a major reason behind the rejection. The Ministry of Economic Development had already approved part of the 1.3 trillion ruble (25 billion dollar) transfer to Rosneft from the National Welfare Fund. The intra-ministry dispute highlights how state firms are looking to SWFs for unconventional government financial support in the face of sanctions-driven stress on Moscow's budget and restricted access to international capital markets. Impacts SWFs are helping to offset the impact of low oil prices and regional turmoil. The anti-crisis effort is boosting spending on infrastructure. Weaker exchange rates will increase the value of resources in domestic currencies.

Orthodox debt strategy may not pay off for Mexico

2020 ◽  
Keyword(s):  
Capital Markets ◽  
Public Debt ◽  
Fiscal Deficit ◽  
International Capital ◽  
Foreign Investors ◽  
Content Type ◽  
International Capital Markets ◽  
Borrowing Costs ◽  
Bond Issues

Significance Public debt increased from the second quarter of 2020, mainly due to the sharp economic contraction and peso depreciation. Impacts A debt downgrade would not cut off Mexico’s access to international capital markets, but it would increase borrowing costs significantly. Efforts to avoid a higher fiscal deficit, and debt, will weigh on growth expectations for 2021. As Mexico becomes less attractive for foreign investors, long-term bond issues in dollars will become more popular than those in pesos.

Parts of Greek economy will be unreformed post-bailout

2018 ◽  
Keyword(s):  
Ageing Population ◽  
International Capital ◽  
Content Type ◽  
Balance Sheets ◽  
International Capital Markets ◽  
Reform Agenda ◽  
The Public ◽  
Part Time ◽  
Greek Economy

Significance Greece will re-enter international capital markets solely on the strength of its economy, after a near-decade-long recession that wiped out one-quarter of its output and left one-fifth of the working population unemployed. Although Greece turned a corner in 2017, with year-on-year growth that continued into the first quarter of 2018, the economy remains fragile and continuing reforms depend on the government’s willingness and ability to adhere to the reform agenda. Impacts The burden of non-performing loans on banks’ balance sheets (close to 50%) will constrain credit growth and slow down economic recovery. In the long term, an ageing population will weigh heavily on the public finances, complicating achieving agreed primary budget surpluses. A shift towards temporary and part-time employment will delay recovery in productivity levels.

Mexico unveils a realist fiscal package for 2016

2015 ◽  
Keyword(s):  
Economic Growth ◽  
Oil Prices ◽  
Economic Uncertainty ◽  
International Capital ◽  
Content Type ◽  
International Capital Markets ◽  
Approval Ratings ◽  
Budget Proposal ◽  
The Government ◽  
Spending Cuts

Significance President Enrique Pena Nieto's government will maintain its policy of continuous but relatively mild fiscal tightening, following the 2016 budget proposal submitted to Congress on September 8. The fiscal deficit should peak in 2015 at 3.5% of GDP, and despite the plunge in oil prices and meagre economic growth, is expected to fall to 3.0% of GDP next year. Impacts Amid the economic uncertainty of Latin America, the Mexican economy will continue to perform relatively well. Any unexpected fiscal blows, such as a further plunge in oil prices, will be confronted with spending cuts rather than tax increases. The government should have no problems issuing debt in international capital markets, but Pemex's borrowing costs may increase. Meagre economic growth during 2015-16 could damage Pena Nieto's already low public approval ratings.

Riyadh will liquidate assets faster than Gulf peers

2017 ◽  
Keyword(s):  
Public Investment ◽  
Oil Prices ◽  
Investment Fund ◽  
Sovereign Wealth Funds ◽  
Content Type ◽  
International Partnerships ◽  
Asset Classes ◽  
The Impact ◽  
Asset Managers

Subject Prospects for Gulf Arab sovereign wealth funds. Significance Lower oil prices since 2014 have hit Gulf Cooperation Council (GCC) sovereign wealth funds (SWFs) to different degrees. The impact in Saudi Arabia has been especially marked. All the funds, however, face the challenge of retaining or increasing the returns and liquidity of their assets and professionalising their management. Impacts Gulf SWFs will witness a long-term decline in importance relative to non-commodity SWFs in Asia. Saudi Arabia’s Public Investment Fund (PIF) could buck the trend of increasingly professionalised management. Diversification into new asset classes will open new opportunities for international partnerships. Foreign asset managers pitching for business in the Gulf will have to present higher-quality proposals as SWFs become more selective.

Pemex downgrades hit AMLO’s economic vision for Mexico

2019 ◽  
Keyword(s):  
Private Sector ◽  
Federal Government ◽  
Capital Markets ◽  
Oil Prices ◽  
International Capital ◽  
Content Type ◽  
International Capital Markets ◽  
The Government ◽  
The Impact ◽  
Death Knell

Subject Pemex downgrades Significance Ratings agency Fitch on June 6 downgraded the bonds issued by state-owned oil firm Pemex to BB+ from BBB-, pushing the rating into ‘speculative grade’ or ‘junk’ territory. The move came a day after Fitch downgraded the bonds of the federal government by one notch, to BBB from BBB+, citing the impact of Pemex’s financial prospects upon those of the government. Moody’s shifted its outlook for the government’s debt from stable to negative but maintained its A3 rating. Impacts The possibility of further downgrades will be a permanent shadow on the government’s economic actions at least until 2020. Any downgrading would have an impact on the borrowing costs of Mexican private sector companies in international capital markets. An abrupt fall in oil prices could be a death knell for Pemex, and would deal a significant blow to the exchequer.

SHOULD THE PRIVATE SECTOR PROVIDE PUBLIC CAPITAL?

2007 ◽  
Vol 11 (3) ◽  
pp. 318-346
Author(s):  
SANTANU CHATTERJEE
Keyword(s):  
Open Economy ◽  
Public Capital ◽  
Borrowing Constraints ◽  
International Capital ◽  
Standard Assumption ◽  
Production Externalities ◽  
International Capital Markets ◽  
Private Provision ◽  
Large Production ◽  
Government Provision

The choice between private and government provision of a productive public good like infrastructure (public capital) is examined in the context of an endogenously growing open economy. The accumulation of public capital need not require government provision, in contrast to the standard assumption in the literature. Even with an efficient government, the relative costs and benefits of government and private provision depend crucially on the economy's underlying structural conditions and borrowing constraints in international capital markets. Countries with limited substitution possibilities and large production externalities may benefit from governments encouraging private provision of public capital through targeted investment subsidies. By contrast, countries with flexible substitution possibilities and relatively smaller externalities may benefit either from governments directly providing public capital or from regulation of private providers. The transitional dynamics also are shown to depend on the underlying elasticity of substitution and the size of the production externality.

Sovereign Wealth Funds and Long-Term Investments in Sub-Saharan Africa

2016 ◽  
Author(s):  
Boubacar Diallo ◽  
Fulbert Tchana Tchana ◽  
Albert G. Zeufack
Keyword(s):  
Sub Saharan Africa ◽  
Sovereign Wealth Funds ◽  
Sub Saharan

Determinants of Inflation in Vietnam: A VECM Approach

2015 ◽  
Vol 22 (04) ◽  
pp. 26-50
Author(s):  
Ngoc Tran Thi Bich ◽  
Huong Pham Hoang Cam
Keyword(s):  
Interest Rate ◽  
Crude Oil ◽  
Error Correction ◽  
Budget Deficit ◽  
Oil Prices ◽  
Crude Oil Prices ◽  
Domestic Credit ◽  
Short Run ◽  
The Impact

This paper aims to examine the main determinants of inflation in Vietnam during the period from 2002Q1 to 2013Q2. The cointegration theory and the Vector Error Correction Model (VECM) approach are used to examine the impact of domestic credit, interest rate, budget deficit, and crude oil prices on inflation in both long and short terms. The results show that while there are long-term relations among inflation and the others, such factors as oil prices, domestic credit, and interest rate, in the short run, have no impact on fluctuations of inflation. Particularly, the budget deficit itself actually has a short-run impact, but its level is fundamentally weak. The cause of the current inflation is mainly due to public's expectations of the inflation in the last period. Although the error correction, from the long-run relationship, has affected inflation in the short run, the coefficient is small and insignificant. In other words, it means that the speed of the adjustment is very low or near zero. This also implies that once the relationship among inflation, domestic credit, interest rate, budget deficit, and crude oil prices deviate from the long-term trend, it will take the economy a lot of time to return to the equilibrium state.

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