US President Donald Trump signed an executive order on February 3, calling for the establishment of a sovereign wealth fund for the United States within 12 months, noting that he will be “one of the largest boxes in the world.”
But experts and analysts ask questions about the goals of this fund, and how will it be funded and manage, and will the desired benefits be achieved, according to a report by Bloomberg?
What is the sovereign wealth fund?
Sovereign wealth funds are investment tools run by governments, and their global value is estimated at more than $ 13 trillion, according to the “Global SWF”, which specializes in tracking these boxes. The nature of these boxes varies between:
- Financial reserve fundsLike the Norwegian sovereign fund, which includes $ 1.74 trillion of oil and gas revenues.
- Holding fundsIt is invested in state -owned assets such as the Singapore Holding Holding Company.
- Strategic investment fundsWhich aims to attract investments and enhance economic development, such as the Saudi Investment Fund.
Why does Trump want to create a sovereign wealth fund?
So far, the real goal of the new American Fund has not become clear, but Trump’s statements and treasury minister Scott Besent indicate different possibilities:
- Its use as a financial reserve to face crises, as many countries have done during the Korona pandemic.
- Selling or mortgaging the federal assets to re -invest returns in new sectors, which Besent described as “liquefying the fundamentalist side of the US budget for the benefit of the American people.”
- Funding specific investment operations, such as buying a Tik -Tok platform from its mother Chinese company, which raised fears that the fund would be just a way to circumvent the property and acquisition laws.
How can the box be funded?
During his New York Economic Club speech last September, Trump indicated that he intends to finance the fund from the customs duties imposed by his administration on China, Mexico and Canada.
However, analysts believe that this idea is not easily implemented, as customs returns are often used to finance the public budget, and not to establish long -term investment funds.
Possible risks
History of sovereign wealth funds are full of financial scandals, such as the Malaysian sovereign fund scandal “One Malaysia Devilop Dhard” (1MDB) that the US Department of Justice described as “the largest financial corruption issue in history.”
https://www.youtube.com/watch?v=qp-yiwptCa
Among the risks referred to by the Bloomberg report:
- Corruption and mismanagement, the absence of transparency may lead to the exploitation of the fund in personal or political interests.
- Uncomfortable investment decisions, especially if the money is directed to purchase inappropriate assets such as Tech Talk.
- The politicization of the fund, as it can be used to achieve short -term political goals, may harm its financial reputation.
Reactions and expectations
According to Professor Paul Rose of the University of Kis Western Reserve, the success of any sovereign fund depends on its goals and independence.
Diego Lopez, CEO of Global SWF, also expressed his doubt about the ability of the American Fund to raise funds quickly to take advantage of Tek Tok, saying, “If we look at the available federal assets, we will find that there is a few of them that can be used to finance billions of dollars in a purchase process “.
Can the box succeed?
The success of the American sovereign fund depends on how it is established and managed, and international experiences indicate that successful funds such as the Australian and New Zealand sovereign fund enjoy complete independence from political intervention, which enhances its credibility and its ability to achieve sustainable profits.
But under the Trump administration, and with no clear details of the fund, the questions remain open whether it will become a strong financial tool or just a short -term political project.
