Tuesday, August 14, 2007

Investment Jihad

Yet another front in the Jihad War needs to be understood and confronted.

From familysecuritymatters.org
Exclusive: Sovereign Wealth Funds – a Potential Tool of Asymmetric Warfare
(Part One of Four)

David J. Jonsson
Date: August 13, 2007

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The rise of Russia, China and the Islamist states, along with their control of energy resources and the growth of Sovereign Wealth Funds, leaves future dominance by a liberal democracy such as America, in grave doubt.

Role of Sovereign Wealth Funds Controlled by the Authoritarian Great Powers

Liberal democracy, led by the United States may have emerged triumphant from the struggles of the 20th century. But the rise of the non-democratic powers of Russia, China and the Islamist states utilizing the combined power of control of energy resources and the growth of Sovereign Wealth Funds (SWF) leaves the liberal democracy’s ultimate victory and future dominance in doubt. Overseas investments by Sovereign Wealth Funds have always had the potential to cause alarm in the destination countries. Because they are driven by governments of the totalitarian and Authoritarian Great Powers, they compel countries to take immediate attention

How powerful Sovereign Wealth Funds decide to invest their vast armory of cash will play a pivotal role in reshaping financial markets in the next decade. These funds are going to have the ability to buy any global company, to create panic in markets if they move too precipitously, even to dwarf the political clout of international financial institutions. They can no longer be ignored.

The Sovereign Wealth Funds are potentially a powerful tool of asymmetric warfare like none we have witnessed before.
The Leftist/Marxist – Islamist Alliance is using its propaganda machine to convince us that Investment funds run by authoritarian governments sound scary. They are not. So trumpets The Economist print edition of July 26, 2007.
GO FOR a walk in Chelsea, an expensive bit of London, and you may stroll by the Coldstream Guards' barracks, now the property of the government of Qatar; a branch of the venerable Barclays bank, soon to be part-owned by the People's Republic of China; and then buy a picnic at Sainsbury's, Britain's oldest supermarket, which the Anglophile Qataris are trying to buy too. What goes for Chelsea may soon be true for neighbourhoods in open economies all over the world: governments are on a shopping spree. (see Governments go shopping)
In considering the role of Sovereign Wealth Funds it is imperative to consider the difference between state vs. private ownership. However, in some cases the difference is blurred because in some cases the state influence, political motives and ideology override the fund ownership as in the case of funds from Islamist countries.

In much of Europe and emerging markets, it took decades for many economies to be free from the controls of state-owned enterprises (SOEs). Are we now seeing the return of state ownership in the infrastructures and large industries, not by the local governments, but by foreign states?
In any case, there should be more discussions and studies on whether SWFs are really returning our Western economies to the former days of state-owned enterprises, but to an even worse case that of foreign state owned entities.

Beware, Wakeup, a foreign state entity – be it either from an Authoritarian Islamist state or Russia or China – they may be the new owner of your newspaper, radio station, electric utility, and even your most sensitive supplier of war material.

Read the rest here and, if you wish you may read part two.

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