The president of the United States, Donald Trump, has signed an order to create a sovereign wealth fund, expressing the hope that he can buy the application of short video, Tiktok.
According to The Guardian, Trump signed the executive order on Monday with the aim of establishing the sovereign fund of wealth as a tool for economic development, saying: “We have enormous potential. I think that in a short period of time, we would have one of the greatest funds. “
While he did not explain how such a background would work, the president of the United States told reporters: “We are going to create a lot of wealth for the fund. And I think it's time for this country to have a sovereign wealth fund. “
Meanwhile, a sovereign wealth fund is an investment fund owned by the government through which the country's financial assets are administered. Assets such as foreign exchange reserves, commercial surpluses and money from natural resources.
Here are things that you should know about Trump's plan to establish a sovereign wealth background.
1. Tiktok's purchase
The United States will be associated with the social media platform, Tiktok, owned by Bytedance Ltd, for a participation in it. Recently, Tiktok was eliminated to address national security concerns that could arise from applications that are owned by foreigners. However, Trump has signed an order for the platform to be restored for 75 days.
However, the reason for this step is also to obtain the property of applications and platforms that are used in the US.
2. Economic Development Tools
The Sovereign Wealth fund is intended to serve as an economic development tool for the development of infrastructure, such as airports, the strengthening of the influence that the United States has in other countries and relieve families and small businesses in the United States taxes.
3. Strict government and openness
The fund has the potential to achieve many things, such as the reduction of government debt, infrastructure construction and the growth of the influence of the United States in Panama and Greenland, worldwide.
However, CNBC reported that critics thought that handling it requires transparency and disciplined governance due to the risk of corruption, a clash of interest and political interference in investment matters.
4. Global comparison
The funds find their way to global financial markets through investment in shares, bond investment and real estate investment, while having participations in private capital and infrastructure.
The nation with the back of the largest sovereign wealth, according to SWFI It is Norway with more than $ 1.7 billion in assets with China in second place with approximately $ 1.3 billion.
These countries have great budget surpluses and have administered productively sovereign wealth funds. UU. On the other hand, the United States has been working with large deficits.
5. Impact of smaller nations
This is not the first time that an idea is mentioned about the US Fund. However, they are commonly used by smaller nations that have a wide variety of natural resources and fiscal surpluses.
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