Bird dung started the boom in sovereign wealth funds. The British colonial government of the archipelago nation of Kiribati in the South Pacific created the first such fund in 1956. Back then, Kiribati exported phosphates -- that is, guano -- for use in fertilizer. The government deposited its phosphate royalties in an investment fund on the theory that future generations should share in the profits from this exhaustible resource. Today, the guano is gone, but the fund, with about $500 million in assets, is nearly 10 times as large as the country's gross domestic product Sovereign wealth funds and their cousins -- national-pension and currency-stabilization funds -- have lately burgeoned. Like Kiribati's, many of the government-run funds have their roots in their home nations' natural resource wealth, especially oil exports....
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