Beware Sovereign Wealth Funds

It seems the new political hot potato fresh on the heels of the Dubai Ports debacle is the growing back lash against Sovereign Wealth Funds. Bobbie S. Neal of the ABA Middle East Committee has an interesting discussion on this issue on the Middle East Law Blog.


The main problem with SWFs is that they are primarily from foreign investors in China and the Middle East. This is raising some national security concerns in Congress. The problem is, with the economy in recession, the housing slump, the stock market down, and our national debt, we are becoming desperate for capital and overseas is the natural place to get it. Perhaps we need to begin working on our underlying economic problems before quickly nixing SWFs. However, some of the reforms offered by Congress, such as greater transparency, are welcome and maybe necessary.