Articles

The small open economies of the Gulf and Southeast Asia are pioneers in the establishment of

Sovereign Wealth Funds (SWFs). The SWFs of countries like Qatar and Singapore are among the

world’s largest in terms of total asset size relative to Gross Domestic Product. This article looks

at the different compulsions behind the setting up of SWFs by small open economies.

Sovereign wealth funds (SWFs) have traditionally been created to recycle excess reserves from natural resource or non‐commodity revenues. However, in recent years funds are being established under conditions of capital scarcity with objectives to contribute domestic economic development, often through the buildout of national infrastructure programs. Such trends in new fund creation represent a fundamental shift in the sovereign wealth fund paradigm and raise serious questions about how these entities are to be capitalized and also the implications of capitalization models on their sustainability. This study examines the recent evolution of SWF models focused on economic development. Its analytic focus is drawn, in particular, to countries that are neither endowed with oil wealth, nor otherwise enjoy export surpluses to be used to capitalize a development‐oriented SWF. While this study is relevant to and expands the scope of the broad literature on SWFs, its specific contribution is as a focused analysis of how SWF funding sources impact achieving long‐term financial and socio‐economic development objectives.

Colleagues said he tweeted more than any professor they knew, and Calestous Juma’s tweets covered a swarm of things. Income inequality, and a free-trade area for Africa, you might expect. Those were the subjects he taught at Harvard: getting poorer countries, especially in Africa, to grow and thrive was the obsession of his life. But he also tweeted about a wheelchair that could climb stairs, the increasing size of steaks, and the maximum number of goats seen eating up in a tree. He was extra-delighted to send out a New York Times editorial, from 1878, about Thomas Edison’s new “aerophone”: “Something ought to be done about Mr Edison, and there is a growing conviction that it had better be done with a hemp rope.”

Calestous Juma, a prominent global advocate for sustainable development in struggling countries, particularly in his native Africa, could trace his passion for technological innovation to his arduous childhood in colonial Kenya.

A professor of the practice of international development, and a writer of great range, Calestous Juma promoted technology for the poor and vulnerable throughout the world. He also wrote a book explaining why people are wary of innovation, and delighted his more than 100,000 Twitter followers by retweeting cartoons that ribbed those who are resistant to science.