Certain nations are growing unprecedented wealth from oil and gas revenue and large trade surpluses, and are investing at unprecedented levels in other countries via Sovereign Wealth Funds (SWFs). SWFs continue to increase rapidly in quantity, size and reach, placing ownership of domestic industries in the hands of foreign governments. This study investigates if SWFs are a threat to Australia's national security, either directly by effecting Australian domestic industry, or indirectly by exacerbating corruption and instability in the Asia Pacific region. Four threat categories are investigated: 1) influence of company plans, 2) geo-political influence, 3) access to sensitive technology, and 4) the ideological concern of a shift of the free market paradigm. There are benefits, challenges and opportunities resulting from SWFs. This study finds there is a dilemma as nations want to attract the benefits, while safeguarding against challenges. This study concludes that SWFs do not meet the definition of a threat to Australia's national security, a definition that must be reserved for only the most critical security concerns, but do present complex policy challenges, and require monitoring and ongoing management by Australian policy makers.

Approved for public release; Distribution is unlimited. The opinions and conclusions expressed herein are those of the student-authors and do not necessarily represent the views of the U.S. Army Command and General Staff College or any other governmental agency. (References to these studies should include the foregoing statement.)