Quora Answer: Why Do Sovereign Wealth Funds Not Invest in Education in Developing Countries?

The following is my answer to a Quora question: “Why do sovereign wealth funds not make a long-term investment in educating the population of countries such as Bangladesh, and take advantage of the skilled manpower?”

It is not the responsibility of sovereign funds to address the policies of failed, and corrupt governments in developing nations.  The duty of a sovereign fund is to invest the wealth of a nation to benefit the citizens of its own nation.  It is far more cost effective to invest in ventures that have a high probability of success, instead of the lottery of interfering in the policies of external sovereign states.

Sovereign funds tend to have two mandates: to mitigate the political and currency risk of the state by investing in a variety of instruments, sectors and regions across the world; and to secure access to markets; and resources.  The former is obvious, whereas the latter is not.  Interfering in the development of developing nations is not part of this mandate, and is politically dangerous, which obviously increases the political risk.  The fund would be seen as interfering in government, and a colonial power of sorts.  This would have repercussions elsewhere, and invite unwelcome media spotlight.