A game of “who was first” is playing out between Biden and Trump over creating an American sovereign wealth fund.
The concept of “sovereign wealth fund” stems from the Middle East, when Kuwait created the “Kuwait Investment Authority” in 1953 to invest extra revenue from oil sales.
Since then, mainly energy-rich nations, from Norway to Australia, have set up sovereign wealth funds to drive foreign investment. In recent times, non-energy economies have also jumped onto the bandwagon, like the Philippines, which established the Maharlika Investment Corporation with $2.3 billion in funding. Sovereign wealth funds don’t just have to invest in other nations, they can invest at home, as Maharlika focuses on developing two million hectares of untapped state land in the Philippines.
For much of the world, establishing a sovereign wealth fund was a smart way to slice energy multiple ways. Energy, like oil, was a source of revenue. But it needn’t stop there. That same revenue could then be reinvested, domestically or globally, expanding the nation’s influence.
However, a sovereign wealth fund would serve a very different purpose for the US.
It would be established to ensure America can compete in the 21st century, with a particular focus on China and protecting American long-term national interests.
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