The National: Sovereign Wealth Funds to Multiply

Mirtchev, A. (2010, June 26). Sovereign Wealth Funds to Multiply. The National.

Dr. Alexander Mirtchev, President of Krull Corp., maintains that SWFs are increasingly seen as bound to play a more critical role in global economic security, driven by the imperatives for a growing number of states to establish new mechanisms to exert geo-economic, as well as possibly geopolitical, pressure. These funds are strongly positioned to act as a first choice source of financing in the current cash-starved economic environment in Europe and other regions.  Indeed, SWFs have taken on a new role that goes beyond being a source of cash and fall-back option for alleviating sovereign deficit issues. They are becoming part of states’ considerations in establishing a more advantageous position in the global economic and geopolitical landscape in the wake of the global economic crisis. The diverse advantages they are seen to convey to governments have actually spurred intentions of establishing new SWFs. Within the framework of depressed valuations among European economies that appear to have fully embraced austerity, SWFs can not only buffer their own sovereigns from the boom and bust cycles of the global economy, but may actually become an “insurer of last resort”. At the very least, SWFs can serve as a “bridge” that could ease the transition from state intervention to market-oriented strategies. In this manner, they are gaining prominence as legitimate elements of the fundamental mechanisms that could be deployed to strengthen global economic security