Sovereign Wealth Funds in the Gulf Arab States: Sustainability and Ongoing Challenges

This study analyzes the sustainability of sovereign wealth funds (SWFs) in the Gulf Cooperation Council (GCC) countries and monitors pressures that may negatively impact SWFs' sustainability. The challenges associated with the future of these funds are also discussed. The study concludes that, as oil revenues fluctuate and decline and foreign direct investment shrinks, there are numerous threats to these funds' sustainability. Additional threats include complicated bureaucratic procedures, the absence of transparency, and weak Gulf SWF governance. Accordingly, the study recommends political and economic reforms in the Gulf states and governmental commitment to promoting financial and investment programs and achieving SWFs' objectives of diversifying sources of income.


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Abstract

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This study analyzes the sustainability of sovereign wealth funds (SWFs) in the Gulf Cooperation Council (GCC) countries and monitors pressures that may negatively impact SWFs' sustainability. The challenges associated with the future of these funds are also discussed. The study concludes that, as oil revenues fluctuate and decline and foreign direct investment shrinks, there are numerous threats to these funds' sustainability. Additional threats include complicated bureaucratic procedures, the absence of transparency, and weak Gulf SWF governance. Accordingly, the study recommends political and economic reforms in the Gulf states and governmental commitment to promoting financial and investment programs and achieving SWFs' objectives of diversifying sources of income.


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