Give the people's wealth to the people

Dr. Norman Bailey

Israel's sovereign wealth fund, finally activated, should be used to narrow the country's shockingly wide economic gaps.

The Israeli government has finally activated the sovereign wealth fund that was authorized years ago to accumulate the levies collected under the Natural Resources Profits Law, chiefly from the companies and partnerships exploiting Israel's offshore gas reservoirs. 

Many countries around the world have such funds, and they are used for many different purposes, such as unexpected fiscal crises or energy shortages, and exceptional infrastructure projects.

The new fund provides Israel with an historical opportunity that should not be missed; namely, to use it to fund an investment trust or corporation for each and every citizen of the country.

The most famous community investment trusts in the world are the
Alaskan native corporations, founded in 1971 and which by 2019 were generating $10.5 billion for the 140,000 Alaskan natives: Eskimos, Indians, and Aleuts, who as a result are by far the wealthiest native peoples in the world.

In 2011, I was asked to design a community investment trust for the city of Akko, where rioting between the Arab and Jewish communities had recently occurred, as part of an overall municipal renewal project for the city sponsored by the Jewish-Arab Center of the University of Haifa. The trust was to be capitalized by the municipal property, and the fund, to be owned by all Akko residents, would invest in all kinds of development projects, industrial, commercial and real estate. I did so, but unfortunately, the Center was unable to raise the funds necessary to begin the project, which was never implemented.

The Israeli sovereign wealth fund, converted into a national investment trust or corporation, would provide every Israeli citizen with a share in the fund, the value of which would increase with the growth of the fund. Israeli newborns would be issued their share at birth. The shares could be inherited, but could not be bought or sold.

In this way, the sovereign wealth fund, which after all belongs to the Israeli people, will serve as a counter-weight to the otherwise constantly increasing concentration of wealth (defined as income-producing assets) in an ever-smaller percentage of the population.

Dr. Norman Bailey is professor of Economic Statecraft at the Galilee International Management Institute, and adjunct professor at the Institute of World Politics, Washington DC. Dr. Bailey was a senior staff member of the National Security Council during the Reagan administration and of the Office of the Director of National Intelligence during the George W. Bush administration.

Published by Globes, Israel business news - - on June 1, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

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