Sovereign funds : a threat or an opportunity ?

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.