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Mon, 18 Feb 2013 22:11 - Updated Tue, 19 Feb 2013 16:37

Angola Sovereign Fund mentioned as a reference

FSDEA

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Toronto – The Angolan Sovereign Wealth Fund (FSDEA), created by the Executive to promote the country’s socio-economic development and generate wealth for the future generations was mentioned as a reference during a lecture held recently in the Canadian city of Toronto.


Addressing the meeting, Madelaine Drohan, Canadian writer and correspondent for the magazine “The Economist”, said her country has no such a fund, but countries like Norway, East Timor and Angola, being more prudent, have decided to create a sovereign fund.


According to her, such funds, created on the basis of revenues from oil, gas, mining and other natural resources, are used by governments as a potential to generate wealth for the future generations.
She said although the federal government of Canada has no such a fund, some provinces like Alberta and Quebec do have one.


According to the lecturer, the Alberta Fund, which was established in 1976, currently amounts tot abut Usd 16 billion, while the Quebec one was of Usd 4.3 billion, until March 2012.


Madelaine Drohan stated that Norway is the best example, mentioning the fact that the country has invested 100 percent of its oil and gas revenues in generating wealth.


As a result, the specialist said, until August last year, the Norway sovereign wealth fund was estimated at Usd 617 billion.


Mentioning the advantages of the fund, the expert said it has the function of both creating wealth and keeping an equity among generations, as the revenues from the natural resources of the present can also benefit future generations, even if they (resources) eventually cease to exist.


Another advantage mentioned by the specialist has to do with the fact that it helps keep the country’s macro-economic stability.


Prices of commodities rise and drop. If a government drafts its plan based on revenues from these resources and the prices in the market come down, this can cause serious constraints, she said.


She added that instead, if the revenues are invested and the plans are based on the profits coming from those investments, the funds remain more guaranteed.