Sovereignty Challenges

“ Preface

During my short tenure in 2012 as the head of the Real Estate Fund for the Libyan Investment Authority (Libya’s Sovereign Wealth Fund), I began to question why such a massive institution failed to achieve the profits and growth of its regional peers. It quickly became clear that, in addition to its inept executive team, Libya’s fragile, broken government institutions played a major role in the fund's failure—and, more broadly, drove the country’s chaotic collapse from 2012 to the present day. Seeking a deeper understanding of how oil wealth, international investment, and regional politics intersect, I began researching and writing in 2014 on global real estate investments, institution-building, and the political economy of the Middle East and Africa.

This book represents a curated collection of essays written over the past decade covering oil, sovereign wealth funds, nation-building, and constitutional requirements. Although some of these essays are about a decade old, the concepts and ideas discussed remain highly relevant in today’s political economy. The core idea binding these chapters together is that without strong institutions, most systems will fail. The need for a "government of laws, not of men" simply reinforces the idea that without a constitutional foundation to better manage wealth and political progress, everything will fail at some point.

Libya, alongside other Middle Eastern and African countries, is used as a reference point for the shortfalls of rich nations in the absence of the rule of law and strong institutions, or when there is an attempt to weaken them. However, the scope of this book extends far beyond this region, drawing on global investment experiences from across the world and examining how global powers can affect the direction and fate of many nations. Also, my most recent research, published by the Cambridge Middle East and North Africa Forum (MENAF) in Cambridge, England, examined the growing geopolitical competition between China and the United States across the Middle East and Africa, and its future impact on the growth and stability of this region. This competition has shaped and will, over the next decades, shape the investment, energy, and political landscape of each country and the entire region.

As a reader, you will not find easy answers in this book as to why many resource-rich nations fail while others with fewer fortunes succeed. My ten-year search across various sectors and cultures has led me to a much broader question: In the Middle East and Africa, is failure driven by an old, deeply rooted social tribal system, a lack of focus on education and free thinking where a herd mentality is more prevalent, or by design from internal and external powers? Or is it a combination of all three?

I hope you enjoy reading these essays.

— Omar Khattaly