Shafaq News/ The financial advisor to the Iraqi Prime Minister, Mudher Muhammad Saleh, said that Iraq intends to establish a Sovereign Wealth Fund (SWF) in the near future.
In a statement to shafaq News Agency, Saleh said, "Iraq does not have an SWF. However, he has the investment portfolio of the [Central] Bank, which is responsible for the stability of the domestic economy and currency. It can be considered a pseudo-SWF. There is also Iraq's Fund for Foreign Investments and investments in Arab joint ventures valued at nearly three billion dollars, from which it yields limited revenues. Those can be considered small SWFs."
"Gulf states established massive SWFs. Norway has the biggest though at 1.25 trillion dollars," he continued, "Norway built its SWF from oil revenues. It devises its budget to seek balance. The surplus supplies various investments that generate more revenues. This, consequently, contributes to a larger SWF."
"The Iraqi government considers establishing a similar SWF. However, there is a deficit in the budget, not surplus," he continued, "we proposed establishing a fund in which we deposit assets equal to the Kuwait war compensations that we fully reparate in few months. The fund can be upheld with other resources and deployed in investing in mineral wealth."
A sovereign wealth fund is a state-owned investment fund comprised of money generated by the government, often derived from a country's surplus reserves. SWFs provide a benefit for a country's economy and its citizens.
The funding for an SWF can come from a variety of sources. Popular sources are surplus reserves from state-owned natural resource revenues, trade surpluses, bank reserves that may accumulate from budgeting excesses, foreign currency operations, money from privatizations, and governmental transfer payments.
