Dag Detter

Financial sector reform in a centrally planned economy requires systematic separation of governance of lenders, borrowers, and work-out vehicles for non-performing loans (NPLs). This is crucial in addressing problems of bad loans and zombie companies that survive only on new loans and/or government guarantees. A mechanism for resolving these problems can help drive dynamic economic growth. Doing this properly can free up substantial resources to be redirected towards public services or… Visa mer

Financial sector reform in a centrally planned economy requires systematic separation of governance of lenders, borrowers, and work-out vehicles for non-performing loans (NPLs). This is crucial in addressing problems of bad loans and zombie companies that survive only on new loans and/or government guarantees. A mechanism for resolving these problems can help drive dynamic economic growth. Doing this properly can free up substantial resources to be redirected towards public services or infrastructure investment, reduce tax burdens, or strengthen state finances. Placing real assets (factories, transport systems, farms, shops) under well-motivated management will realise quick benefits. It can also assist in developing domestic capital markets, further supporting the economy, and bringing real benefits to the population. In the medium term, the largest government-owned corporations should lose state guarantees and source some of their funding from non-bank lenders. Issuing bonds helps develop the capital market; it may require a bond rating. Obtaining private financing without a government guarantee will impose accountability on management. Visa mindre

What is needed is more private sector, more competition, and economic growth. However, launching a wholesale privatisation drive like in the 1980s’ and 1990s’ is neither politically desirable nor financially efficient, as this usually results in an undue transfer of public wealth to the private sector. This time around, it will be paramount to ensure that public wealth is maximised for the benefit of society as a whole, helping to pay for the investments required to improve infrastructure… Visa mer

What is needed is more private sector, more competition, and economic growth. However, launching a wholesale privatisation drive like in the 1980s’ and 1990s’ is neither politically desirable nor financially efficient, as this usually results in an undue transfer of public wealth to the private sector. This time around, it will be paramount to ensure that public wealth is maximised for the benefit of society as a whole, helping to pay for the investments required to improve infrastructure, climate, and the needs of a greying population.

Adopting accounting-driven, net worth-based fiscal rules/targets for the government in general, along with professional management of public assets, creates major opportunities to improve a country’s long-term public finances while simultaneously addressing short-term problems. IMF research makes it clear that governments with a stronger net worth (assets minus liabilities) recover faster from recessions and have lower borrowing costs. Visa mindre

Focusing on net worth and the balance sheet is a better way to manage public assets and liabilities.

The book, ‘Public Net Worth—Accounting, Government and Democracy’ presents a compelling case for adopting accounting-driven, Net Worth-based fiscal rules/targets. It argues that such an approach can substantially improve long-term public finances without cutting public services or increasing taxes.

Better asset and liability management can significantly increase government… Visa mer

Focusing on net worth and the balance sheet is a better way to manage public assets and liabilities.

The book, ‘Public Net Worth—Accounting, Government and Democracy’ presents a compelling case for adopting accounting-driven, Net Worth-based fiscal rules/targets. It argues that such an approach can substantially improve long-term public finances without cutting public services or increasing taxes.

Better asset and liability management can significantly increase government revenues—by several per cent of GDP per annum.

While focusing solely on debt and cash metrics, governments overlook the value of public assets and the full extent of liabilities. This narrow perspective leaves politicians without the necessary insight or accountability, leading to suboptimal use of resources and potential unfairness across generations. Visa mindre

LKAB har beskrivits som en statlig bank med vidhängande gruva. Nu ska det politiskt styrda bolagets gigantiska kassa användas för att finansiera en riskfylld, men från politiskt håll hyllad satsning på grönt stål. Detta visar tydligt på bristerna i styrningen av de statliga bolagen

I statens fastighetsbestånd finns oerhörda ekonomiska värden. Men i redovisningen är de avskrivna och formellt sett värdelösa, något som leder till att fastigheter förfaller och konstskatter hotas,

Ur ett finansiellt perspektiv är kommuner och regioner egentligen stora fastighetsbolag med en vidhängande välfärdsverksamhet. Den offentliga sektorn är Sveriges största fastighetsägare. Men det saknas transparens. Bedrivs deras verksamheter effektivt nog?

Förra året anmäldes över nittontusen bidragsbrott i Sverige, dvs när någon av uppsåt eller grov oaktsamhet lämnar oriktiga uppgifter eller underlåter att anmäla ändrade förhållanden, och därigenom orsakar fara för felaktig utbetalning av sådana ekonomiska förmåner inom välfärdssystemen.

So why do most governments still not produce and use accounting information that is sufficiently relevant, timely and reliable? Because accounting is boring? Perhaps the reason is the relationship between “accounting” and “accountability”. But whatever the cause, the joke is on taxpayers and citizens – those alive today and the yet-unborn.

Sveriges kommuner och regioner nu är ute på sin årliga tiggarrunda efter att de än en gång förlorat överblick över omfattningen av sina tillgångar, skulder och ekonomiska situation. Till skillnad från tv-programmet Lyxfällan står de helt ogenerat i tv, år efter år, och istället för skuld och skam kräver de mer pengar

NIGERIA continues to face massive development challenges, including the need to reduce the dependence on oil for exports and revenues, diversify its foreign exchange sources, close the infrastructure gap, build strong and effective institutions, address governance issues and strengthen public financial management systems.
The good news is that in the public sector, at all levels of government, the asset side of the government balance sheet offers immense untapped potential in the short and… Visa mer

NIGERIA continues to face massive development challenges, including the need to reduce the dependence on oil for exports and revenues, diversify its foreign exchange sources, close the infrastructure gap, build strong and effective institutions, address governance issues and strengthen public financial management systems.
The good news is that in the public sector, at all levels of government, the asset side of the government balance sheet offers immense untapped potential in the short and long term. These assets include public infrastructure, real estate, and operational assets such as state-owned enterprises (SOEs). Visa mindre

Governments need to create balance sheets that properly reflect assets and liabilities, and to understand their future obligations and revenue prospects. Net Worth – both today and for the future – should be the measure of financial strength and success.

Only if this information is put at the centre of government financial decision-making can the present challenges to public finances around the world be addressed effectively, and in a way that is fair to future generations.

The growing reach of state companies with government support to compensate for pursuing policy goals distort competition and lower the income and economic growth in the country.

Even if unaccounted for, public commercial assets remain. At best, widely disbursed public commercial assets will likely be managed for the benefit of the few that control the assets for the moment rather than for society as a whole. At worst, they are ignored and not managed at all.

Avoiding proper… Visa mer

The growing reach of state companies with government support to compensate for pursuing policy goals distort competition and lower the income and economic growth in the country.

Even if unaccounted for, public commercial assets remain. At best, widely disbursed public commercial assets will likely be managed for the benefit of the few that control the assets for the moment rather than for society as a whole. At worst, they are ignored and not managed at all.

Avoiding proper accounting, a tool that has helped the private sector allocate capital efficiently and create the wealth we all enjoy today is like avoiding modern medical examination methods for fear of being diagnosed with a terminal illness. This is despite knowing that there is a higher survival rate if the illness is detected early. Visa mindre

For the development of Sri Lanka, the Government must fully explore and exploit all potential sources of funding and all methods of embedding a thoroughly market-driven economy, thus improving the private investment climate. Sri Lanka has a large state-owned sector, making effective management of state-owned assets essential.

Omfattande investeringar för svensk vattenförsörjningen är bara ett första varningstecken om de infrastrukturinvesteringar som Sverige behöver.

The idea of separating wealth management from policymaking has been a practice for many centuries. Most governments have delegated public management of several core financial operations to separate professional institutions, such as, government debt to the debt management office and interest rates to the Central Bank. Similarly, some governments have delegated the management of surplus revenue from exports to sovereign wealth funds (SWFs). These SWFs, often in resource-rich countries, have… Visa mer

The idea of separating wealth management from policymaking has been a practice for many centuries. Most governments have delegated public management of several core financial operations to separate professional institutions, such as, government debt to the debt management office and interest rates to the Central Bank. Similarly, some governments have delegated the management of surplus revenue from exports to sovereign wealth funds (SWFs). These SWFs, often in resource-rich countries, have succeeded in generating wealth for society and future generations. Visa mindre

REGERINGEN BEHÖVER SKAPA en balansräkning som korrekt återspeglar tillgångar och skulder samt förstå sina framtida förpliktelser och inkomstmöjligheter. Offentlig nettoförmögenhet (tillgångar minus skulder) – snarare än missvisande begrepp som budgetöverskott eller skulder över BNP – bör vara måttet på finansiell styrka och framgång. Endast om nettoförmögenheten placeras i centrum för regeringens ekonomiska beslutsfattande kan de aktuella utmaningarna för offentliga finanser effektivt hanteras… Visa mer

REGERINGEN BEHÖVER SKAPA en balansräkning som korrekt återspeglar tillgångar och skulder samt förstå sina framtida förpliktelser och inkomstmöjligheter. Offentlig nettoförmögenhet (tillgångar minus skulder) – snarare än missvisande begrepp som budgetöverskott eller skulder över BNP – bör vara måttet på finansiell styrka och framgång. Endast om nettoförmögenheten placeras i centrum för regeringens ekonomiska beslutsfattande kan de aktuella utmaningarna för offentliga finanser effektivt hanteras på ett sätt som är rättvist gentemot kommande generationer. Visa mindre

Det svenska folket äger stora, delvis dolda, kommersiella förmögenheter via den offentliga sektorn vilka staten, kommuner och regionerna inte förvaltar på det sätt som bäst gagnar Sverige. Det handlar framför allt om bolagsverksamheter och fastigheter.

Korrekt redovisat och professionellt förvaltat skulle dessa kommersiella tillgångar kunna tillföra staten och det allmänna betydande inkomster årligen och samtidigt medföra ökad produktivitet och ekonomisk tillväxt.

The success of postwar economic recovery will hinge on private sector investment, which, in turn, will rely on transparency and the efficient management of the country’s state-owned assets.

Враховуючи масштаби державного сектору та його присутність у багатьох конкурентних галузях, таких як енергетика, транспорт, фінанси, виробництво та нерухомість, приватні інвестори прагнутимуть отримати гарантії того, що державний портфель працює на суто комерційних засадах, без політичних упереджень, несправедливих переваг чи ринкових викривлень.

Sveriges kommuner och regioner är sammantaget landets störste fastighetsägare – ändå går deras ekonomiska verksamhet inte ihop. Inte sedan 2004 har kommunerna haft ett så svagt resultat som nu. I år räknar en fjärdedel av alla kommuner och fyra femtedelar av alla regioner med att inte kunna få ihop sin ekonomi, enligt Sveriges Kommuner och Regioner (SKR) – och vädjar ännu en gång om mer pengar från skattebetalarna.

Det offentliga bör inte köpa tillbaka SBB:s innehav! I stället borde förvaltning och redovisning av det befintliga innehavet prioriteras.
Röster höjs nu från olika politiska läger om att staten genom en lagändring bör köpa tillbaka de fastigheter som eventuellt blir till salu från det krisdrabbade börsnoterade bolaget SBB. Förutom det olämpliga att staten skulle skapa ett prejudikat som går emot grundläggande principer för börsens funktion i en marknadsekonomi, så riskerar dessa… Visa mer

Det offentliga bör inte köpa tillbaka SBB:s innehav! I stället borde förvaltning och redovisning av det befintliga innehavet prioriteras.
Röster höjs nu från olika politiska läger om att staten genom en lagändring bör köpa tillbaka de fastigheter som eventuellt blir till salu från det krisdrabbade börsnoterade bolaget SBB. Förutom det olämpliga att staten skulle skapa ett prejudikat som går emot grundläggande principer för börsens funktion i en marknadsekonomi, så riskerar dessa känsloyttringar att upprepa det ursprungliga problemet med en vårdslös hantering av våra tillgångar. Visa mindre

The best way to reduce sovereign debt is by boosting economic growth. By tapping the hidden value in its balance sheet, governments can exit the crisis faster and more sustainably.

Vem har modet att kräva bättre redovisning av Sveriges offentliga tillgångar och en professionell ägarstyrning genom ett holdingbolag?

Staten, Sveriges största fastighetsägare, har oanade möjligheter att omvandla tidigare kontorshus och andra fastigheter till bostäder.

När politiker äger företag leder det till ständiga sammanblandningar av kommersiella och politiska överväganden. Det riskerar att leda till kapitalförstöring.

Skall en kärnkraftsmotståndare vara styrelseledamot i Vattenfall – Sveriges största elproducent och tillika största ägare av svensk kärnkraft? Diskussionen kring nomineringar till statliga bolag har i somliga fall avspeglat en syn som om att statliga bolag är en politisk lekstuga för ideologiska drömmar och idéer. En lekstuga som i det här fallet har påverkat Sveriges elförsörjning och riskerat inte bara industrins och näringslivets försörjning, utan även hushållens och hela samhällsapparatens… Visa mer

Skall en kärnkraftsmotståndare vara styrelseledamot i Vattenfall – Sveriges största elproducent och tillika största ägare av svensk kärnkraft? Diskussionen kring nomineringar till statliga bolag har i somliga fall avspeglat en syn som om att statliga bolag är en politisk lekstuga för ideologiska drömmar och idéer. En lekstuga som i det här fallet har påverkat Sveriges elförsörjning och riskerat inte bara industrins och näringslivets försörjning, utan även hushållens och hela samhällsapparatens kostnader för el. Ansatsen visar även politikernas ansvarslöshet inför statens finanser, det vill säga skattebetalarnas pengar, när det kommer till statliga bolag. En portfölj som enligt Regeringskansliets egen redogörelse är värd mer än 800 miljarder kronor, och där en till synes marginell värdeförändring kan motsvara kostnaden för till exempel hela polisens verksamhet. Visa mindre

Svenska staten går miste om ofantliga summor skattemedel. Varför? För att tomter och byggnader i offentlig regi inte bokförs till deras rätta värden. Till exempel är Systembolagets huvudkontor i centrala Stockholm bokförd till 68 miljoner kronor, trots att den unika byggnaden i själva verket borde ha ett värde runt 1,1 miljarder kronor.

Like fire, a Public Wealth Fund requires robust safeguards to prevent it from being misused.

As governments face unprecedented financial challenges, from recent global economic shocks and the consequences of climate and demographic change, the need to mobilise all available resources is urgent. Recruiting professionals as Non-Executive Directors to manage the portfolio of public commercial assets will help increase fiscal space and reduce fiscal risk.

Den offentliga sektorns tillgångar har ett större värde än bolagen på Stockholmsbörsen. Regeringen kan frigöra hundratals miljarder kronor med reformer som främjar bättre förvaltning

We should be able to use the accounting system that supports the management of our common resources in the same way that a traveller might use a GPS navigation system when planning and making a journey.

Navigation systems have two main elements. First, an underlying map which provides an up-to-date picture not just of the terrain (which doesn't change), but also of the road system and points of interest (which change quite slowly). Second, a dynamic overlay, which provides real time… Visa mer

We should be able to use the accounting system that supports the management of our common resources in the same way that a traveller might use a GPS navigation system when planning and making a journey.

Navigation systems have two main elements. First, an underlying map which provides an up-to-date picture not just of the terrain (which doesn't change), but also of the road system and points of interest (which change quite slowly). Second, a dynamic overlay, which provides real time information about traffic conditions and the current position of the user. With this information, the traveller can make plans based on good information, and adapt to reflect changing circumstances - or, indeed, changes in the traveller's plans. Visa mindre

Good leadership requires good information to support smart, timely decisions. More fundamentally, democracy itself relies on information that can be understood and trusted by its citizens, interpreted by journalists, and form the basis for informed policy proposals. Nowhere is this more important than in finance.

High-quality accrual accounting, supported by independent audit, is a vital source of that information for governments as for businesses. Unfortunately, few countries use this… Visa mer

Good leadership requires good information to support smart, timely decisions. More fundamentally, democracy itself relies on information that can be understood and trusted by its citizens, interpreted by journalists, and form the basis for informed policy proposals. Nowhere is this more important than in finance.

High-quality accrual accounting, supported by independent audit, is a vital source of that information for governments as for businesses. Unfortunately, few countries use this high-quality accounting information as the basis for their entire financial management system. Visa mindre

Many governments are facing fiscal distress and in the more extreme cases a crisis requiring debt restructuring. Their situation is similar to that of a ship out of fuel and adrift on the high seas. Even if it is lucky enough to be offered a rescue, it will not help just to get the ship refueled if the holes in the hull and fuel tank are not also repaired.

Today’s governments have largely forgotten the importance of an accurate inventory of their assets. This problem, rooted in government accounting systems, impedes valuation and efficient asset management. A quick, low-cost solution is to find the hidden assets by doing an asset map and managing them through a public wealth fund

The scope for greater productivity from public sector assets is huge.
The example of Transport for London is instructive – only some 1,000 rateable properties are accounted for in their financial statements, with an implied value of around £17-21bn.
But there are a further 10,400 properties unaccounted for in their balance sheet, and these could be worth tens of billions of pounds.

Unfortunately, in Latin America and the Caribbean (LAC), societies have not reaped the many potential benefits that non-financial public assets could generate. This paper is making an attempt to change that.

Governments around the world, and at every level (national, regional, local) own assets of immense economic value – not the least real estate - without realising it. What’s out of sight is out of mind and out of budget - and so this vast wealth is excluded from the calculus of government financial decision-making. An Asset Map offers a simple way of demonstrating the truth of this proposition, in any city, region or country.

Instead of taxes - US state and local governments are #RethinkingRevenues to be less reliant on taxes. Government Finance Officers Association (GFOA) has published this paper for its 19,000 state, provincial, and local government finance officers in the United States and Canada.

There are many reasons for advocating a new way to measure and assess the fiscal position of governments. This blog reflects some of the key reasons. The authors of the blog approach the subject from their different perspectives but share the view that the widespread focus on debt and deficit is damaging, and that the net worth is a better reflection of fiscal position than is debt alone.

By bringing these different perspectives together, we hope to build consensus around the need for a… Visa mer

There are many reasons for advocating a new way to measure and assess the fiscal position of governments. This blog reflects some of the key reasons. The authors of the blog approach the subject from their different perspectives but share the view that the widespread focus on debt and deficit is damaging, and that the net worth is a better reflection of fiscal position than is debt alone.

By bringing these different perspectives together, we hope to build consensus around the need for a step change in the way fiscal position is described and analysed. Visa mindre

A more complete view of a country’s fiscal health can help governments build public trust, generate revenues and even save lives.

This could encourage policymakers to take into account the full spectrum of the public sector balance sheet by introducing basic tools such as accrual accounting and a focus on net worth as the most comprehensive fiscal measure.[[4]] These fundamental building blocks would help bring about greater transparency and disclosure, enabling governments to pursue optimal decisions with respect to the management of public assets to the benefit of society as a whole.

Public Wealth Funds are an idea whose time has come. This important study explains why this is so and
how to create them successfully. It should not just be given close attention. Its ideas should be
implemented (Martin Wolf in the Foreword)

The economic collapse that has followed the COVID-19 pandemic has led governments and central banks to provide emergency funding to private firms in distress on a previously unimaginable scale.

The majority of interventions have taken the form of liquidity support via direct loans or loan guarantees. However, as the second wave of the virus spreads, there is increasing recognition that loading more debt on to troubled firms may not be a sustainable solution in the medium to long-term… Visa mer

The economic collapse that has followed the COVID-19 pandemic has led governments and central banks to provide emergency funding to private firms in distress on a previously unimaginable scale.

The majority of interventions have taken the form of liquidity support via direct loans or loan guarantees. However, as the second wave of the virus spreads, there is increasing recognition that loading more debt on to troubled firms may not be a sustainable solution in the medium to long-term. Widespread defaults due to debt-induced insolvencies could lead not only to higher unemployment, but would also damage the financial system, the public finances and the wider economy. Visa mindre

Local governments across the UK are being hit from several directions. Business rates, council tax and transport incomes are all being squeezed by local and national lockdowns, just as new demands are being made on local public health and social care budgets.

As deficits mount, governments can use their real estate holdings to create breathing room.

Countries need cash – a lot of it and as soon as possible - to survive the grim fallout from COVID-19 and to be able to navigate toward recovery. The critical situation that they are facing compels more creative thinking about how best to manage public finances and to unlock new sources of funding. Those countries able to tap the hidden store of value in their balance sheets have a better chance to come out of the crisis faster, and more sustainably, than those that cannot. Generating value… Visa mer

Countries need cash – a lot of it and as soon as possible - to survive the grim fallout from COVID-19 and to be able to navigate toward recovery. The critical situation that they are facing compels more creative thinking about how best to manage public finances and to unlock new sources of funding. Those countries able to tap the hidden store of value in their balance sheets have a better chance to come out of the crisis faster, and more sustainably, than those that cannot. Generating value from the balance sheet is a well proven alternative, but one that requires considerable political will. It is an alternative fit for a crisis, when the politically impossible becomes the politically inevitable. Visa mindre

Countries need cash to survive the fallout from COVID-19. By tapping hidden value in their balance sheets, they can exit the crisis faster and more sustainably. But success depends on strong political will, writes Hanan Amin-Salem, Ian Ball, Dag Detter and David Walker.

Worries about an upsurge in sovereign debt are reflected in a wave of sovereign credit rating downgrades. So far this has affected mainly emerging and frontier market countries, but as many developed economy governments face the prospect of wider fiscal deficits — and perhaps the need to step in to directly support public sector enterprises and even private sector companies — their debt burdens too will rise significantly.

Establishing a credible National Wealth Fund would help to alleviate the country’s multiple crises.

Dag Detter, an investment advisor and former president of the Swedish government's holding company, explores creative ways for U.S. states and cities to improve their finances. Paul Burton hosts.

Lebanon should create a national wealth fund to help it maximise the value of public assets and thus better address its debt imbalances.

Given that the COVID-19 crisis demands unprecedented levels of stimulus spending, policymakers should use the occasion to adopt a more flexible form of public-sector accounting. Insofar as public-sector assets like infrastructure add to the state's "net worth," they should be put to use generating new revenue flows.

Given that the COVID-19 crisis demands unprecedented levels of stimulus spending, policymakers should use the occasion to adopt a more flexible form of public-sector accounting. Insofar as public-sector assets like infrastructure add to the state's "net worth," they should be put to use generating new revenue flows.

Proper management of assets will help governments keep debt costs low. These measures will ultimately improve a country’s credit rating, lowering its cost of borrowing. A reduction in a government’s debt load, or a slowdown in its pace of accumulation, and an increase in government financial assets impact a number of the key metrics global rating agencies use in their sovereign rating methodologies.

In 1948, the US passed an initiative that send more than $12bn (the equivalent of about $128bn today) to Western Europe to recover from the Second World War. Dag Detter argues the world will need something just as drastic in the wake of Covid-19, and better management of public assets could be the answer.

Professionally-managed public assets can help optimize services for society as well as increase revenues and strengthen balance sheets, without using taxes or fees.

Public wealth is a well-proven tool to increase fiscal space, reduce risks, and improve the cost of capital for governments and government-owned enterprises around the world. The brief is intended for use by government administrations and government-owned enterprise interested in funding infrastructure and other investments… Visa mer

Professionally-managed public assets can help optimize services for society as well as increase revenues and strengthen balance sheets, without using taxes or fees.

Public wealth is a well-proven tool to increase fiscal space, reduce risks, and improve the cost of capital for governments and government-owned enterprises around the world. The brief is intended for use by government administrations and government-owned enterprise interested in funding infrastructure and other investments that benefit society as a whole. Visa mindre

Proper use of public commercial assets has been a core component of Singapore’s strategy to move the economy from developing to developed status in a single generation.

Governments around the world face pressure on their finances as well as a need to diversify their economies. By reassessing the potential of the commercial assets on their balance sheet, most notably real estate, they have the opportunity to bring about transformative change.

Paying for the required investments in infrastructure and affordable housing seems to be associated with as much wishful thinking as exercise and healthy eating. We expect federal money once again to make U.S. cities an example to the world and that public debt will disappear by magic. Public-private partnerships, tax-exempt bonds, subsidized opportunity zones or an infrastructure bank will rain money on communities and pay for the smart cities of tomorrow. Just as magical drinks and wonder… Visa mer

Paying for the required investments in infrastructure and affordable housing seems to be associated with as much wishful thinking as exercise and healthy eating. We expect federal money once again to make U.S. cities an example to the world and that public debt will disappear by magic. Public-private partnerships, tax-exempt bonds, subsidized opportunity zones or an infrastructure bank will rain money on communities and pay for the smart cities of tomorrow. Just as magical drinks and wonder diets will give us the perfect body and healthier living. Visa mindre

Modern accounting techniques that correctly identify public owned real estate and enable it to be put to full use could help address the global housing crisis and reduce economic disparity

Now that we have professionalised the management of debt and the management of interest rates then why not do the same with assets?

Singapore has and is one of the leaders in this field. Temasek and GIC are two of the public wealth funds that have helped fund the economic development of the city-state, while the Housing Development Board (HDB) has provided almost 80 per cent of its citizens with affordable and well-maintained public housing.

We would not contemplate not being… Visa mer

Now that we have professionalised the management of debt and the management of interest rates then why not do the same with assets?

Singapore has and is one of the leaders in this field. Temasek and GIC are two of the public wealth funds that have helped fund the economic development of the city-state, while the Housing Development Board (HDB) has provided almost 80 per cent of its citizens with affordable and well-maintained public housing.

We would not contemplate not being professionalized in areas such as medicine and engineering, or?
Visa mindre

Four years have passed since the launch of the 2030 Agenda and its 17 Sustainable Development Goals. Mobilizing the necessary resources remains central to its success. Investments in human, social, and physical capital are at the core of sustainable and inclusive growth – and represent an important share of national budgets. At the World Bank we are discussing with a number of countries such as Jordan, Egypt, Pakistan and Argentina regarding improving fiscal sustainability and increasing fiscal… Visa mer

Four years have passed since the launch of the 2030 Agenda and its 17 Sustainable Development Goals. Mobilizing the necessary resources remains central to its success. Investments in human, social, and physical capital are at the core of sustainable and inclusive growth – and represent an important share of national budgets. At the World Bank we are discussing with a number of countries such as Jordan, Egypt, Pakistan and Argentina regarding improving fiscal sustainability and increasing fiscal space by mobilizing revenues and strengthening their balance sheets through professional management of public assets. Visa mindre

Most countries' public assets exceed their public debt. While managing public debt has become a matter of great concern during the financial crisis, public assets remain opaque and largely ignored. This article provides some explorative calculations on the size of public wealth at the national level and for some example cities. We describe how some countries and cities are experimenting with institutional setups, such as national and urban wealth funds, aiming to achieve sounder management… Visa mer

Most countries' public assets exceed their public debt. While managing public debt has become a matter of great concern during the financial crisis, public assets remain opaque and largely ignored. This article provides some explorative calculations on the size of public wealth at the national level and for some example cities. We describe how some countries and cities are experimenting with institutional setups, such as national and urban wealth funds, aiming to achieve sounder management, better economic outcomes and more transparency for voters. Visa mindre

The largest wealth segment in the world is hidden.

It is held by governments but the assets are mis-measured and mis-managed. Citizens—the ultimate owners of these assets—should demand better. If “public wealth” was properly measured, managed and better understood, society as a whole would benefit. But this requires modern accounting in the public sector and professional accountants to help build robust public finances.

If the world wants growth, it needs accounting and… Visa mer

The largest wealth segment in the world is hidden.

It is held by governments but the assets are mis-measured and mis-managed. Citizens—the ultimate owners of these assets—should demand better. If “public wealth” was properly measured, managed and better understood, society as a whole would benefit. But this requires modern accounting in the public sector and professional accountants to help build robust public finances.

If the world wants growth, it needs accounting and accountants in the public sector. Visa mindre

Adopting accounting standards similar to those used by private companies and based on accrual accounting could restore trust in governments.

Looking at the economic history of the western world, accounting was one of the main prerequisites for political and economic success and accountants are often behind the rise and fall of both large corporations and nations.

It is with accounting as with health. When all is well it’s unnoticed and unappreciated. But when it fails, it is… Visa mer

Adopting accounting standards similar to those used by private companies and based on accrual accounting could restore trust in governments.

Looking at the economic history of the western world, accounting was one of the main prerequisites for political and economic success and accountants are often behind the rise and fall of both large corporations and nations.

It is with accounting as with health. When all is well it’s unnoticed and unappreciated. But when it fails, it is impossible to disregard Visa mindre

The federal government’s partial shutdown is over, for now. Nevertheless, the consequences for local governments that rely on federal funding for long term investments — housing, infrastructure projects, and recovery from climate related disasters — underscore their over-dependence on Washington D.C.

The Chicago parking meter lease is not just a bad deal that happened in 2008. It’s an ongoing problem year after year. The lasting effect of the sold off rights to on-street parking revenues created an annual hole in the budget of $45 million in a city with serious financial problems. Chicago, along with most U.S. cities and urban counties, face an impending infrastructure investment meltdown. Promising plans are put aside because of fiscal constraints, and even the most necessary repairs lack… Visa mer

The Chicago parking meter lease is not just a bad deal that happened in 2008. It’s an ongoing problem year after year. The lasting effect of the sold off rights to on-street parking revenues created an annual hole in the budget of $45 million in a city with serious financial problems. Chicago, along with most U.S. cities and urban counties, face an impending infrastructure investment meltdown. Promising plans are put aside because of fiscal constraints, and even the most necessary repairs lack funding.

It doesn't have to be this way. Visa mindre

Governments own airports, harbors, metro systems, utilities, and perhaps most important, far more real estate than is generally understood.

According to estimates from the International Monetary Fund, public assets are worth at least twice gross domestic product, but most of these assets are unknown to the governments and taxpayers that own them. Moreover, their values are often recorded at levels far below their true worth. This means there are no incentives to ensure that the huge… Visa mer

Governments own airports, harbors, metro systems, utilities, and perhaps most important, far more real estate than is generally understood.

According to estimates from the International Monetary Fund, public assets are worth at least twice gross domestic product, but most of these assets are unknown to the governments and taxpayers that own them. Moreover, their values are often recorded at levels far below their true worth. This means there are no incentives to ensure that the huge value in public assets is used to support the budget. Visa mindre

According to the International Monetary Fund, the world’s public assets are worth at least twice global GDP. Instead of neglecting those assets, as most governments do today, countries should be using them to generate value.

We rely on engineers using modern technology to design and build robust bridges. Building robust public finances, we need accountants using modern accounting systems. This will benefit societies today and reduce the burden on future generations.

Passengers on New York City’s subways sometimes marvel at the transit system’s sprawling size or the ambitious engineering since the first line opened in 1904. Instead riders ought to be amazed that the decrepit subways still work at all—and worried that they won’t last forever.

Cities urgently need to ramp up home building to ensure that housing shortages do not become a drag on economic growth or fuel social tension. Here is how.

It is often claimed that there is this great wall of money searching for yield - but a dearth of investment opportunities.
At the same time there are commercial assets owned by the public sector – representing a veritable potential goldmine, unfortunately hidden from the public view, without professional management and impaired by rent-seeking activities of the insiders controlling and often mismanaging these assets

From roads and bridges to airports and rail lines, US infrastructure has fallen into neglect and disrepair, prompting a search for new methods of funding, such as privatization and franchising schemes. But rather than leasing and selling off public assets, why not tap their latent investment value?

National and local governments own a potential goldmine of assets, mostly in the form of real estate and state- or municipal-owned companies. These could have been an integral part of public finance and used to fund government budgets, lower taxes or pay for vital infrastructure. Unfortunately these assets are mostly poorly governed, and the lack of transparency invites graft and clientelism.

If you either live or work in New York City you get used to things being crowded —
sidewalks, shops, streets, buses, trains, buses — pretty much everywhere you go
there are people with you. Presumably it is the same in most other large
metropolitan areas as cities are increasingly becoming places where people want to
live. Although overall city population growth averages less than 1% in the U.S., what
has been different recently is that the infrastructure in the city itself has… Visa mer

If you either live or work in New York City you get used to things being crowded —
sidewalks, shops, streets, buses, trains, buses — pretty much everywhere you go
there are people with you. Presumably it is the same in most other large
metropolitan areas as cities are increasingly becoming places where people want to
live. Although overall city population growth averages less than 1% in the U.S., what
has been different recently is that the infrastructure in the city itself has aged,
leading to an increased perception that the city is more crowded – subways feel
more crowded as old signal equipment failures lead to train delays, overdue
maintenance on roads and bridges leads to road congestion and increased traffic
jams and commuter trains are running ‘standing room only’ into urban train stations
that are at capacity. Visa mindre

People in São Paulo are said to spend more time in traffic jams – making their way to family dinners, late-night parties, yoga classes, romantic dates – than they do enjoying those activities. The solution to this problem is often seen as more and better infrastructure, including public transport and affordable housing. Such a boom in infrastructure investments would not only make life better and boost the economy, but also help improve the environment and cut CO2 emissions.

But the… Visa mer

People in São Paulo are said to spend more time in traffic jams – making their way to family dinners, late-night parties, yoga classes, romantic dates – than they do enjoying those activities. The solution to this problem is often seen as more and better infrastructure, including public transport and affordable housing. Such a boom in infrastructure investments would not only make life better and boost the economy, but also help improve the environment and cut CO2 emissions.

But the political will to convert such plans into action will only happen if all sides open up to new ways of thinking about how to pay for these badly needed investments. Visa mindre

Professional management of the public assets that are already in place will ultimately accelerate the development of human-centred, sustainable and affordable urban infrastructure and services.

Local authorities need radical policies to resolve the acute shortage of affordable rental housing. One answer could be right up their own street

Managing city assets better would help local leaders boost their economies, finance social and economic infrastructure, and help cover the costs of required maintenance without competing with government budgets, leaving more for spending on health care, education, and other social initiatives.

As the world becomes more urbanized, better budgeting has become a key concern for city leaders everywhere. Unlocking the public value of poorly utilized real estate, for example, or monetizing transportation and utility assets, could and should become core urban strategies.

Net worth, not debt or the deficit, is the best measure of a government’s position

Publication of the book - The Public Wealth of Cities, by Brookings

Mobilizing existing resources to meet the current and future needs of cities.

Crumbling streets and bridges. Poorly performing schools and other social services. These are common themes in cities, which too often struggle just to keep the lights on, much less make the long-term investments necessary for future generations.
It doesn’t have to be this way. This book by two Swedish experts in public finance… Visa mer

Publication of the book - The Public Wealth of Cities, by Brookings

Mobilizing existing resources to meet the current and future needs of cities.

Crumbling streets and bridges. Poorly performing schools and other social services. These are common themes in cities, which too often struggle just to keep the lights on, much less make the long-term investments necessary for future generations.
It doesn’t have to be this way. This book by two Swedish experts in public finance describes a new way of restoring economic vitality and financial stability to cities, using steps that already have proven remarkably successful in some cities. The key is unlocking hidden social, human, and economic wealth in cities. A focus on public wealth shifts attention and resources from short-term spending to longer-term investments that can vastly raise the quality of life for many generations of urban residents. Visa mindre

Local councils in the UK are diving headlong into the commercial property market, acting as though they are private sector hedge funds – it’s a role they’re not set up for and they run huge risks.

The reason behind this commercial adventure is the need to fund gaps in their budgets after years of spending cuts from central government. But if the public sector were better at maximising property assets, perhaps it would not need to try such dangerous arbitrage to bridge the gap in funding.

Professional management of these portfolios could benefit investors and society alike.


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Professional management of these portfolios could benefit investors and society alike.


Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email [email protected] to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/605268e0-45d5-11e7-8519-9f94ee97d996

It is often claimed that there is this great wall of money searching for assets — but a dearth of investment opportunities.

Yet at the same time there are commercial assets owned by the public sector — transportation, airports, ports, water and electric utilities, communications, as well as vast portfolios of real estate that represent a veritable gold mine. Unfortunately, much of it is hidden from the public view, without professional management and impaired by rent-seeking activities of the insiders controlling and often mismanaging these assets.

There is an obvious opportunity to match this wall of money with this potential gold mine.
Visa mindre

The solution to the NHS funding crisis is professional management of NHS property while maintaining public ownership but isolated from short-term political meddling.

The redevelopment of St Bartholomew’s Hospital in the City of London is a rare example of what the NHS could be doing on a national scale.

Not only will it create a state-of-the-art hospital for central London, but it will release former hospital buildings for redevelopment into flats and offices, which will pay for some of the hospital’s investments.

Governments around the world would gain much from consolidating their commercial real estate, suggest Dag Detter and Stefan Fölster

A family owning a portfolio of properties would not lose sight of what assets they own, its value or how much money it yields each year. A private company failing to publish its financial accounts would face serious legal implications.

In many countries, the government is the biggest owner of properties. The Greek central government is often cited as… Visa mer

Governments around the world would gain much from consolidating their commercial real estate, suggest Dag Detter and Stefan Fölster

A family owning a portfolio of properties would not lose sight of what assets they own, its value or how much money it yields each year. A private company failing to publish its financial accounts would face serious legal implications.

In many countries, the government is the biggest owner of properties. The Greek central government is often cited as owning almost a 100,000 properties and the government of the Ukraine almost a million. Although most of these are now theoretically consolidated under a single management, many properties are still not fully registered, with vital information missing. In fact, despite efforts lasting several years, the National Land Registry in both countries included only a fraction of the total land available, private or public.
Visa mindre

In his foreword to the book The Public Wealth of Nations, Adrian Wooldridge, Management Editor of The Economist, suggests that Dag Detter and Stefan Fölster have proposed a new idea in the public policy arena which not only identifies a problem that few people had realized existed, but suggests a relatively pain-free way to tackle it while at the same time boosting the size of the global economy.

Best books of the year 2015 - The Economist and the Financial Times

The single largest owner of wealth in nearly every country is not a private company; nor is it an individual like Bill Gates, Carlos Slim, or Warren Buffet. The largest owner of wealth is all of us collectively, otherwise known as “taxpayers.” And we all have our own personal wealth manager — whom we usually call “the government.” Governments own a larger stock of assets than all very wealthy individuals put together, and even more than all pension funds, or all private equity funds

Publication of the book - The Public Wealth of Nations, by Palgrave Macmillan

We have spent the last three decades engaged in a pointless and irrelevant debate about the relative merits of privatization or nationalization. We have been arguing about the wrong thing while sitting on a goldmine of assets.

Don’t worry about who owns those assets, worry about whether they are managed effectively.

Why does this matter? Because despite the Thatcher/ Reagan economic revolution… Visa mer

Publication of the book - The Public Wealth of Nations, by Palgrave Macmillan

We have spent the last three decades engaged in a pointless and irrelevant debate about the relative merits of privatization or nationalization. We have been arguing about the wrong thing while sitting on a goldmine of assets.

Don’t worry about who owns those assets, worry about whether they are managed effectively.

Why does this matter? Because despite the Thatcher/ Reagan economic revolution, the largest pool of wealth in the world – a global total that is much larger than the world’s total pensions savings, and ten times the total of all the sovereign wealth funds on the planet – is still comprised of commercial assets that are held in public ownership. If professionally managed, they could generate an annual yield of 2.7 trillion dollars, more than current global spending on infrastructure: transport, power, water, and communications.

Based on both economic research and hands-on experience from many countries, the authors argue that publicly owned commercial assets need to be taken out of the direct and distorting control of politicians and placed under professional management in a ‘National Wealth Fund’ or its local government equivalent. Such a move would trigger much-needed structural reforms in national economies, thus resurrect strained government finances, bolster ailing economic growth, and improve the fabric of democratic institutions.

This radical, reforming book was named one of the "Books of the Year" by both the FT and The Economist. Visa mindre

We hear a lot about public debt. But we rarely discuss public wealth: the corporations, financial institutions, land, buildings, infrastructure, and so on that governments own and profit from. Better management of this wealth could pay off handsomely — if only we approached the problem the right way, placing these assets under professional management away from the influence of politicians.

We hear a lot about public debt. But we rarely discuss public wealth: the corporations, financial institutions, land, buildings, infrastructure, and so on that governments own and profit from. Better management of this wealth could pay off handsomely — if only we approached the problem the right way, placing these assets under professional management away from the influence of politicians.

In the U.S., for every 1 percentage point increase in yield from the federal government's asset… Visa mer

We hear a lot about public debt. But we rarely discuss public wealth: the corporations, financial institutions, land, buildings, infrastructure, and so on that governments own and profit from. Better management of this wealth could pay off handsomely — if only we approached the problem the right way, placing these assets under professional management away from the influence of politicians.

In the U.S., for every 1 percentage point increase in yield from the federal government's asset portfolio, general taxes could be lowered by 4 percent. Visa mindre

For more than a quarter of a century there has been a phony war raging between those in favour of public ownership of commercial assets and those against: privatisation versus nationalisation. This polarised and binary debate has missed the point. What matters is not so much who owns the assets but the quality of asset management.

Most governments know much about their debt but little about their assets. If central governments managed their assets better, they could generate annual returns of roughly $3 trillion—more than the world’s yearly investment in infrastructure including transportation, power, water, and telecommunications

Important for Europe to develop a clear protocol for interventions that protect taxpayers interest and maximise taxpayers profit

A regional reform program in the Middle East for its state commercial assets is both a financial and social enterprise with global relevance