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Perspectives for Sovereign Wealth Funds by Dr. Renaud Bouchard

On May 20, 2021, the next session of HSE academic research seminar "Public Finance Modernisation" take part with a new economic report. Dr. Renaud Bouchard, associate researcher (CEMI, Paris, France), made a presentation on the topic: “Sovereign Wealth Funds’ Long-Term Strategy in the Post Covid-19 Period”. This seminar held as an on-line MS Teams conference.

Perspectives for Sovereign Wealth Funds by Dr. Renaud Bouchard

The critical concept of Sovereign Wealth Funds (SWFs) is now more than ever a potential for economic, strategic and financial transformation on a global scale. Funds are increasingly assimilated to the logic of economic development, financial power and sovereignty as part of a new geopolitics. Also, they have gradually replaced geopolitics with geo-economics and geo-finance.

The power of state sovereignty (parallel or in addition to its diplomatic and strategic aspects) is entirely driven by seeking, securing, and maintaining by all means a competitive position in strategic financial markets as well as in investment zones and economic corridors.

Beyond development economics today characterized by the presence of SWFs, the goal now is to connect the vast Eurasian continent in order to put Russia and China until now on the periphery of Europe, but also the Middle East, Africa and Latin America at the center of a new constellation. 

SWFs, new Silk Roads and Eurasian integration offer Russia and China the opportunity to tackle this "external overdependence" by using the tool of sovereign wealth funds to reinforce their influence in the worldwide.

The same time more countries are using this tool to accelerate their economic development or use it to step in the new technological, scientific, economic and financial fields of the twenty-first century.

The rise of SWFs is changing the strategic landscape at the global and regional levels. The way in which States define and respond to the new challenges posed by this new situation that combines extraction, transformation, use and investment of wealth, whether or not derived from the economic and financial transformation of natural resources, will be crucial for the international economic relations of the coming decades.

We build on the existing realistic and rationalistic concepts of balancing, cartel movement, commitment issues and asymmetric information to develop explanations of how States with sovereign wealth funds act in a geopolitical context and thus impact the global economy.

More specifically, we would like to explore the role that different types of uncertainty play in situations of unstable geopolitical equilibrium. Special attention is paid to the nature of the emerging States with sovereign wealth funds, the balance of power and their impact on the global economy in the Post Covid-19 Period.

At the end of R. Bouchard's report, there was a Q&A session and a lively discussion with the participation of colleagues from Oxford University, Stockholm School of Economics, American University in Chisinau, Plekhanov Russian economic university, HSE University and other institutions.

Presentation