In as much as Sovereign Wealth Funds (SWFs) are established to achieve national objectives, the intentions of the United Arab Emirates -- one of the world's largest -- are open to interpretation at home and in invested markets. As Emirati funds channeled through the likes of ADIA and Mubadala continue to increase their foreign investments (Valued at approx. $1Trillion), these state-backed groups have also bailed out financial institutions in the U.S. during the period of volatility. The extent to which these SWFs are helping develop the domestic standard of living rather than bailing out western companies and buying US treasury bonds is in question, and the focus of my project.
What is the effect of the United Arab Emirates' increasing sovereign wealth funds on GDP?
The project will rely on data compiled as of 2000, due both to availability and the period coinciding with the economic boom and crisis in the UAE. Regression report will analyze the relation between SWF growth as an independent variables, and GDP. Given that the majority of these funds have their origins in the sale of oil, and the same commodity constitutes the majority of exports, the analysis would need to extend to factoring in the price of oil. In addition, since GDP is only an indicator, rather than a measurement, of standard of living, multiple regressions will also cover the relation between SWFs and Real Income to compare effects.