Financial expert: Iraq needs a sovereign wealth fund to transform its oil revenues into sustainable wealth.
Financial expert Mahmoud Dagher stressed on Thursday that establishing a sovereign wealth fund in Iraq has become very important after the country was exposed to more than one crisis that caused imbalance and weakness in the economy, noting that the fund can protect the income of Iraqis and work to develop it.
Dagher told Shafaq News Agency, “All successive governments have a desire for centralized control over public funds, and all oil revenues are intended to enter the general budget to consolidate the government’s authority over them.”
He pointed out that there is a “lack of awareness” of the importance of the sovereign wealth fund, which can protect and develop the income of Iraqis, as well as help them with foreign investments inside Iraq and provide weight for investors.
Dagher pointed out that Iraqi governments, until now, “have not been convinced of the importance of having a sovereign wealth fund whose assets are outside Iraq, and which is managed by specialists and companies specializing in asset management in a profitable way, and away from the control of the authority that is taking place over the general budget.”
He continued: “Creating a sovereign wealth fund in this way would preserve the money and make it work and grow, instead of it remaining under centralized control of public funds.”
A sovereign wealth fund is a financial instrument that countries use to manage a portion of their revenues, particularly from natural resources, by converting them into long-term assets and investments instead of spending them entirely within annual budgets. The funds in these funds are typically invested in diversified markets and assets both domestically and internationally with the aim of generating returns, growing wealth, and preserving it for future generations.
Shafaq.com