Now let’s look at the Linaburg-Maduell Transparency Index chart (shown at the top of the post) from the SWF Institute. The scores show each SWFs score and relative ranking with higher scores being the best, or most transparent. It is little surprise to see the list of nations at or near the bottom of this chart. Why does SWF portfolio transparency matter? Internal populations and international governments alike need to know what the long-term investing goals of another nation are in order to avoid misunderstandings that could lead to military conflict. What could conflict centered around an SWF look like? What if Venezuela’s fund was used to steal industrial technology from neighboring Columbia for use in its own endeavors, resulting in a significant setback to the Columbia economy? An Algerian SWF-funded joint venture in Mali was suddenly nationalized, essentially eliminating a previously unreported $20 billion investment (roughly half of Algeria’s estimated fund value)? Would it be more politically astute for one country to invade a neighbor in order to avoid domestic turmoil? Without explicit government backing and greater transparency in developing nation SWFs, the likelihood of military conflict is much higher. For more on the rise of the SWF, and the need for an international SWF economic policy, click here.