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The Sovereign Fund.. Managing National Wealth and Securing the Future of Generations
Wednesday, October 13, 2021 143
Faris Al Salman
The decision to establish the first sovereign fund to manage the national wealth in the country is the most important and bold decision since the stage of change.
The future of future generations, and the government can adopt it as part of an economic reform policy. The oil wealth is permeable in addition to being threatened with being dispensed with, and many countries have begun to adopt alternative and clean energies.
The government is considering establishing a sovereign wealth fund, in which it will deposit funds equivalent to the ongoing compensation for the Kuwait war (deduction of 3% of the revenues of each barrel of crude oil). An Iraqi who is exported).
The establishment of the sovereign fund should not be under the supervision of a narrow range of government advisors (with our respect for their capabilities), but through openness to the forces and segments of the people because it is the owner of wealth, especially since Iraqi universities are full of professors specialized in this In addition, civil society organizations specialized in economics and economic development have previously addressed the issue and organized mature and advanced workshops, including the Baghdad Economic Forum, in which international organizations such as the United Nations and the World Bank participated and came out with solid recommendations.
The biggest challenge of the project is corruption and partisan and sectarian quotas and their impact on the process of forming the fund and its future method of work, especially in choosing the chairman and members of the fund's board of directors.
Because if corruption and quotas infiltrate it, these assets and resources will be squandered and will be lost forever.
Especially since we have before us the model of the pension fund (the size of 50 billion dollars), which, due to corruption and mismanagement, is on the verge of bankruptcy.
We need to be careful in drawing up the fund's structure, its legal framework, methods of governance, management, financing, implementation of its tasks and control, choosing consultants in international investment disciplines and investment portfolios.
In addition to being careful to draw up the fund's policy because we want it to be a good source of revenue (if it were scientifically managed and judged) to compensate for the missed opportunities that Iraq missed, including the rise in oil prices to more than 130 dollars / barrel in 2008, which Norway and other countries exploited The Gulf in creating a large surplus wealth that went to the sovereign funds, while Iraq squandered these revenues as a result of mismanagement and corruption, and they are added to the lost opportunities with the age of the Iraqi state.
The other worrying dilemma is where will the fund’s money be invested? Or profitable international bonds, such as Gulf funds and the Norwegian sovereign fund, or heading to emerging markets with risks?, or in the international real estate market, hedge funds, investment funds in the financial markets, bonds, stocks, futures contracts and raw materials?
In addition to the above A logical question: Will the fund meet the aspirations and ambitions of the Iraqi people and the current Iraqi government in reorganizing the national economy in a way that ensures meeting the Iraqi national security?
I don't think so.... because this fund cannot meet several requirements at the same time.
If we say that to ensure the future of future generations, the controversial and legitimate question will be: What about the current generations who suffer from poverty, illiteracy, etc.?
If we consider that this fund can be a buffer against the normals of time and the government can borrow from it in economic crises, then the fund will be forced to waste its investments in Investment portfolios and assets to provide liquidity to the government at a time when the market is suffering from a financial crisis.
Therefore, Iraq needs a set of bumpers, not a single one, i.e. a package of sovereign funds by benefiting from the experiences of other countries that preceded us in this field while putting the national touch in line with the requirements of the Iraqi economy.
Iraq is characterized by the abundance of its natural, financial and human resources and wealth.
In addition to the importance of its geopolitical location in the region, which urgently requires a rational management of its resources and economy, and this requires taking measures to reorganize the Iraqi economy in order to bear the burdens of sustainable development to create a dynamic, holistic, integrated economy, including the establishment of a package of sovereign funds managed with good governance and transparency as well On the development and support of the Iraqi Fund for Foreign Development as one of the tools of influence of the Iraqi state to secure the vital space within the theory of Iraqi national security.
The development of the Iraqi economy” on 10/25/2017 at Al-Mansour Hotel, in the presence of a group of concerned officials, parliamentarians, local and foreign economic figures, academics and To international organizations, the World Bank and the United Nations.
The Sovereign Fund.. Managing National Wealth and Securing the Future of Generations
Wednesday, October 13, 2021 143
Faris Al Salman
The decision to establish the first sovereign fund to manage the national wealth in the country is the most important and bold decision since the stage of change.
The future of future generations, and the government can adopt it as part of an economic reform policy. The oil wealth is permeable in addition to being threatened with being dispensed with, and many countries have begun to adopt alternative and clean energies.
The government is considering establishing a sovereign wealth fund, in which it will deposit funds equivalent to the ongoing compensation for the Kuwait war (deduction of 3% of the revenues of each barrel of crude oil). An Iraqi who is exported).
The establishment of the sovereign fund should not be under the supervision of a narrow range of government advisors (with our respect for their capabilities), but through openness to the forces and segments of the people because it is the owner of wealth, especially since Iraqi universities are full of professors specialized in this In addition, civil society organizations specialized in economics and economic development have previously addressed the issue and organized mature and advanced workshops, including the Baghdad Economic Forum, in which international organizations such as the United Nations and the World Bank participated and came out with solid recommendations.
The biggest challenge of the project is corruption and partisan and sectarian quotas and their impact on the process of forming the fund and its future method of work, especially in choosing the chairman and members of the fund's board of directors.
Because if corruption and quotas infiltrate it, these assets and resources will be squandered and will be lost forever.
Especially since we have before us the model of the pension fund (the size of 50 billion dollars), which, due to corruption and mismanagement, is on the verge of bankruptcy.
We need to be careful in drawing up the fund's structure, its legal framework, methods of governance, management, financing, implementation of its tasks and control, choosing consultants in international investment disciplines and investment portfolios.
In addition to being careful to draw up the fund's policy because we want it to be a good source of revenue (if it were scientifically managed and judged) to compensate for the missed opportunities that Iraq missed, including the rise in oil prices to more than 130 dollars / barrel in 2008, which Norway and other countries exploited The Gulf in creating a large surplus wealth that went to the sovereign funds, while Iraq squandered these revenues as a result of mismanagement and corruption, and they are added to the lost opportunities with the age of the Iraqi state.
The other worrying dilemma is where will the fund’s money be invested? Or profitable international bonds, such as Gulf funds and the Norwegian sovereign fund, or heading to emerging markets with risks?, or in the international real estate market, hedge funds, investment funds in the financial markets, bonds, stocks, futures contracts and raw materials?
In addition to the above A logical question: Will the fund meet the aspirations and ambitions of the Iraqi people and the current Iraqi government in reorganizing the national economy in a way that ensures meeting the Iraqi national security?
I don't think so.... because this fund cannot meet several requirements at the same time.
If we say that to ensure the future of future generations, the controversial and legitimate question will be: What about the current generations who suffer from poverty, illiteracy, etc.?
If we consider that this fund can be a buffer against the normals of time and the government can borrow from it in economic crises, then the fund will be forced to waste its investments in Investment portfolios and assets to provide liquidity to the government at a time when the market is suffering from a financial crisis.
Therefore, Iraq needs a set of bumpers, not a single one, i.e. a package of sovereign funds by benefiting from the experiences of other countries that preceded us in this field while putting the national touch in line with the requirements of the Iraqi economy.
Iraq is characterized by the abundance of its natural, financial and human resources and wealth.
In addition to the importance of its geopolitical location in the region, which urgently requires a rational management of its resources and economy, and this requires taking measures to reorganize the Iraqi economy in order to bear the burdens of sustainable development to create a dynamic, holistic, integrated economy, including the establishment of a package of sovereign funds managed with good governance and transparency as well On the development and support of the Iraqi Fund for Foreign Development as one of the tools of influence of the Iraqi state to secure the vital space within the theory of Iraqi national security.
The development of the Iraqi economy” on 10/25/2017 at Al-Mansour Hotel, in the presence of a group of concerned officials, parliamentarians, local and foreign economic figures, academics and To international organizations, the World Bank and the United Nations.
