Governments’ interest in setting up SWFs has apparently held strong into 2010. According to Jamel Arfaoui of Magharebia, Tunisian lawmakers are now considering a new SWF to help with the country’s unemployment. Indeed, in the wake of the financial crisis, the unemployment level in Tunisia has apparently risen above 20 percent; an ‘unemployment fund’ is seen by many as a potentially innovative solution.
It seems to me that this is another case where governments may be asking too much of SWFs. This situation reminds me of Maldives President Nasheed’s idea to create a SWF to buy new land and move his country’s people should the Maldives end up totally submerged due to climate change. Or Scotland’s idea to create a new SWF to facilitate independence from the UK.
Setting up a SWF to solve the problem of unemployment when unemployment is already rampant doesn’t really make sense. Why would the government set aside money to invest in financial markets over the long term when it could fruitfully spend the money today to alleviate the problem?
I tend to agree with Mohammed Ammar:
“An unemployment fund in a society where the majority of people are unemployed wouldn’t work for the time being, because it would raise questions over financial resources, which Tunisia lacks now.”
If you don’t have W, you can’t really have an SWF. Moreover, if you think a sovereign debt fund is a good idea, have a look at how that has played out for Dubai.
4 Responses to “Tunisia Considering A New SWF”