The executive order to create the first sovereign wealth fund in America has sparked the discussion about its governance, transparency and potential impact on global markets.
US President Donald Trump announced last week the establishment of the first American wealth box. During his campaign to follow up on such a policy, he pledged, but this time, he canceled it by an executive order directing a plan for the fund within 90 days.
The news about the emerging American sovereign wealth fund should not be surprised by those who follow trends in sovereign financing. Various developed countries, such as the United Kingdom and France, explored the idea of the new sovereign fund-despite financial challenges-to enhance industrial policies, protect national heroes from foreign acquisitions, or progress in advanced but weak technology sectors.
The US government’s initiative is also driven by the recognition that federal assets are not exploited, which creates the opportunity to “liquefy the side of assets in the United States’ public budget for the American people,” according to US Treasury Secretary Scott Payette.
“America is closed from the US dynamic capital and our returns because we are not a player,” said Chris Campbell, Assistant Secretary of the US Treasury Secretary for Financial Institutions during the first period of Trump. the government. “
The Trump administration has not provided details about the fund’s risk file, asset customization, governance structure, transparency, or reporting requirements – factors that usually determine the sovereign wealth box. The news immediately raised doubts between the financial commentators, some of whom view the new initiative as a way to allocate part of the general budget of the Ministry of Treasury to an estimated fund controlled by a selection of the informed. In other countries, similar structures led to ineffective corruption and investments – as shown in Malaysia and Libya. Whether the details of the new box will support these concerns must be seen.
However, Congress must agree to the creation of the box – an arduous battle, given a long -term resistance to privatize federal assets and services, according to Campel.
While some American states have their own sovereign wealth funds – such as the permanent fund in Alaska, which was funded through the state’s income from natural resources – the United States lacks a national fund at the federal level. The creation of such a fund can lead to the position of the United States as a major player in the sovereign international wealth community – a interesting shift at a time when Trump’s “First America” agenda has pushed to withdraw from many international organizations and forums.
One of this forum is the International Sovereign Wealth Fund (IFSWF), which works under the umbrella of the International Monetary Fund. According to its mandate, IFSWF aims to strengthen the sovereign wealth fund community through dialogue, research and self -evaluation. This unique forum brings together money from different countries, both developing and developed economies, with different strategies differently in a distinctive way and asset customization strategies. However, given the new trade focus of the American administration, American participation through federal and state funds can support global markets and promote US leadership. The fund’s affiliation with the Federal Reserve will enhance US participation in such a forum.
In fact, the advertisement alone has already led to a broader controversy on how the United States benefited from its resources and financial infrastructure of strategic investments – at the local and international levels. In fact, the advertisement alone led to a broader controversy on how the United States benefited from its resources and financial infrastructure for strategic investments – at the local and international levels. Discussion can help develop investment experience within the United States government, develop a pipeline of institutional investment talents, and develop commercial investments as tools for security and diplomatic security.
