Foreign Policy Live The New (Sovereign) Wealth of Nations
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Dec 12, 2025 
In this discussion, Jared Cohen, co-head of the Goldman Sachs Global Institute and author of 'The New Wealth of Nations', delves into the transformation brought about by sovereign wealth funds, particularly in the Middle East. He explores how pivotal Gulf funds are shaping geopolitics and global markets, highlighting their investments in AI and infrastructure. Cohen contrasts the Gulf’s instrumental capital with traditional models, assesses global risks, and argues that U.S. industrial policy is more crucial than a sovereign fund for America. Intriguing insights on economic strategy abound!
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Sovereign Funds Are Geopolitical Powerhouses
- Middle Eastern sovereign wealth funds now hold massive influence with $5.6 trillion concentrated in four Gulf countries and rising to $8.8 trillion by 2030.
- They deploy "instrumental capital" that seeks both financial returns and geopolitical domestic leverage.
Kuwait Founded The First SWF
- Kuwait created the world's first sovereign wealth fund in 1953 after prompted by concerns from Winston Churchill.
- The fund began with an all-British board and governor shaping its early governance.
Pandemic And Rivalry Fueled Instrumental Capital
- The pivot to instrumental capital accelerated after COVID and amid US-China rivalry.
- Gulf states benefit from being able to work with both Washington and Beijing, increasing their leverage.
