Jokes aside, there is some truth to the depiction. SWFs are, at their core, instruments of domestic ambition dressed in the language of fiscal prudence. Notwithstanding the economics behind these funds, there is another (usually thick) layer of politics. One only needs to look at the Malaysian state of Sarawak for a more recent take of such dynamics.

Oil, Oil, Everywhere

Like Norway, Sarawak too is blessed with natural resources (especially oil). It has also managed its oil-fueled budget relatively (emphasis by yours truly) well throughout the decades. Go ask your Sarawakian friends about this for a second opinion.

However, just like those guys in Norway (or Kazakhstan, Timor-Leste, Bahrain), Sarawakians are aware that the good times may not last. So, the more productive questions are ‘What happens when the well runs dry?’ and ‘How do you convert finite natural wealth into something that outlasts the commodity itself?’

To be fair, the answers are not really rocket science. They actually look and sound roughly similar: accumulate a fund while times are good, invest it prudently, and draw on the returns when the revenues dry up. In theory, the logic is airtight. In practice, the execution record across the developing world is, ahemm, mixed.

What makes Sarawak interesting is not that it has solved this problem through the inception of the Sarawak Sovereign Wealth Future Fund (SSWFF). It has not, at least not yet. Rather, what’s noteworthy here is the specific combination of political history, institutional design choices, and subnational context that surrounds the East Malaysian state’s attempt.

This I (Malaysia) Promise You

To understand the SSWFF, one needs to understand what Sarawak was promised in 1963 when it joined the Malaysian federation (yes, that’s how we are known in political science).

In exchange for the union, Sarawak (like Sabah next door) was promised certain autonomy (e.g. land and religious matters). Perhaps more consequentially, it was promised a meaningful share of the natural resource revenues it generates in such abundance. This is not unreasonable as the East Malaysia state is, after all, one of the Southeast Asian nation’s primary hydrocarbon-producing territories.

Over the following decades, these promises were not always kept. The centralization of oil and gas revenues at the federal level, driven by the complex demands of governing a large and diverse federation, gradually worked against the terms Sarawak had negotiated at entry. By the time the general election of 2018 opened new space for subnational assertion, Sarawak had generated sufficient support amongst its grassroots to reclaim some lost ground.

The SSWFF, on this reading, is less a technocratic savings vehicle than an act of institutional assertion. The SWF is Sarawak reclaiming in financial form what it had lost through gradual erosion of the original compact. Understanding this is not a footnote to the story - it is the story.

But, Be Cautious Still

Here is where the comparison to Norway (sorry again bros!), however well-intentioned, starts to mislead. The Norwegian Government Pension Fund Global is a national fund, operating with the full sovereign apparatus of an independent state. This means that the fund draws on, amongst other things, independent monetary policy, full legal authority over its natural resources, and no higher political authority to answer to.

Contrast this to Sarawak, a state within a much bigger federation. That changes the calculus in ways that deserve more attention than they usually receive.

The closest instructive analogues are genuinely subnational funds, and the sharpest contrast in that category is between two funds that were created by two different resource-rich subnational governments: Alberta and Alaska.

Alberta’s Heritage Savings Trust Fund, established in 1976 when oil revenues were surging, is the cautionary tale. The fund was capitalized generously at first, with 30% of non-renewable resource revenues directed into it annually. But as global oil prices fell in the early 1980s and provincial budget pressures mounted, the political will collapsed. The contribution rate was cut to 15% by 1983, and by April 1987 contributions were suspended. Income earned by the fund was redirected to general revenue rather than reinvested. The fund then essentially stagnated in real terms for the better part of two decades.

Alaska’s Permanent Fund, also created in 1976, made a different set of choices. The critical difference was constitutional entrenchment: the fund was embedded in the Alaska State Constitution, making it structurally harder for any legislature to raid. A mandatory 25% of mineral royalties flowed into it annually. Rather than simply accumulating assets for government use, Alaska began paying annual dividends directly to residents, in turn creating a broad popular constituency with a direct financial stake in the fund’s preservation.

Today Alaska’s fund stands at over $80 billion. Alberta’s, despite decades of trying to catch up and a recent resumption of contributions, is worth roughly C$32 billion (or approximately US$23 billion). This is a fraction of what the Heritage Savings Trust Fund would be worth had the original saving discipline held.

For Sarawak, both lessons translate directly. The Alberta lesson is about the funding paradox: without institutional protection, a commodity downturn will eventually force a choice between feeding the fund and financing schools and roads. In such situations, the fund almost always loses. The Alaska lesson is about political economy design: the most durable SWFs are not those with the best investment mandates on paper. Instead, they have installed rules and regulation that are challenging to undermine in practice.

So Far (So Good?)

Against that backdrop, Sarawak’s early moves look sensible.

The fund began with initial capital of RM8 billion (roughly $2 billion). By the standards of its Singaporean or Norwegian peers, this is a modest starting point. But size is the wrong lens. What matters at this stage is sequencing.

In April, the SWF announced its first major portfolio commitment: approximately $850 million in global fixed-income and bond assets, alongside another RM1.6 billion in domestic bonds. The chairman described the strategy as one of capital preservation — establishing the investment culture and operational systems before chasing returns.

The fund has also joined the International Forum of Sovereign Wealth Funds as an Associate Member, which matters not so much for the networking as for the governance discipline it imports. A seat at this table exposes the fund to best practices, generating ‘peer pressure’ to behave well.

Plans to add global equities and broader asset classes are on the table. This bonds first approach might strike some observers as timid. It should not. The graveyard of SWFs is well-populated with institutions that moved too fast, too soon. By expanding into riskier assets before they had built the investment culture, risk systems, or political independence, these funds essentially ran themselves into the ground.

Tensions Worth Watching

None of the above means the path is clear for the SSWFF. There are at least three structural tensions that will test the fund’s design over the coming years.

The first is the funding paradox. The fund’s annual appropriations come from Sarawak’s consolidated budget, which itself depends heavily on oil and gas revenue. In other words, the hedge is funded by the very exposure it is designed to hedge against. With elevated oil prices, sustained in part by ongoing turbulence in the Middle East, Sarawak’s coffers currently look comfortable enough that this circularity is easy to overlook. It should not be. Long-run hydrocarbon prices are more likely to disappoint than to surprise on the upside, and when they do, Sarawak will face a genuine choice between feeding the fund and financing schools and roads. Honest planning, not optimistic assumptions, is what the Alberta experience underlines.

The second tension is governance under political proximity. National funds can, at least in principle, maintain a degree of institutional separation from political interference. For a state-level fund, this separation is structurally harder to achieve. The SSWFF Board of Guardians will face inevitable pressure to deploy capital toward near-term priorities rather than long-horizon financial accumulation. This tension between immediate fiscal utility and long-term wealth preservation is not unique to Sarawak as the Heritage Savings Trust Fund found out in its challenging years. Resisting this pressure is not a question of individual integrity. It requires institutional design that makes such interference procedurally difficult, and a leadership culture that treats the mandate as genuinely binding.

The third tension is the subnational ceiling. Sarawak can build a world-class fund, but it operates within a federal system that constrains what it can ultimately do with the proceeds. The fund’s returns can finance Sarawak’s budget, build its institutions, and enhance its fiscal independence. But the broader political negotiation over Sarawak’s autonomy within Malaysia can and will not be resolved by skillful portfolio management alone. The fund is only one instrument of reassertion, not the whole strategy.

Why You Should Care

There is a version of this story that ends badly. Here political interference erodes the investment mandate, a commodity downturn squeezes the budget contributions, and the fund stagnates the way Alberta’s did.

But there is another version. Sarawak completes the transition from a bond-heavy, capital-preservation portfolio to a genuinely diversified long-term fund. The governance infrastructure holds through political cycles. The returns begin to meaningfully supplement — and eventually reduce dependence on — hydrocarbon revenues.

If that second version unfolds, Sarawak will be a more instructive model for developing Asia than Norway (just one last time please) could ever be. Not because it did something different, but because it did something similar with far fewer resources, under far more political constraint, and with the structural limits of subnational status baked in from the start.

Resource-dependent economies across Asia — from the Pacific Islands wrestling with fish and minerals to Central Asian republics sitting on hydrocarbons they are still learning to manage — face their own versions of the same structural question: how do you make a windfall last? Sarawak is running a live experiment in answering it. The results will take a decade or two to read clearly.

But, the experiment has started. That is already more than most manage.

If you’re watching this play out somewhere else, which is your country closer to: Alberta or Alaska? Tell me in the comments.

Disclaimer: This article is a more detailed exploration of my recent op-ed in Nikkei Asia.

The summer 2025 transfer window came and went with comparatively modest net spend. A few high-profile names (yes, that dude…) left rather than arrived. Premier League Profit and Sustainability Rules (PSR) have also constrained what the club can do. Perhaps more consequentially, the club’s Saudi Arabian owner, the Public Investment Fund (PIF), is in the midst of rationalizing its portfolio. All of these isn’t bad news per se, but if one accounts for the enthusiasm that accompanied Newcastle’s 2021 sale to the PIF, then this slowdown reads as a story of frustration, perhaps even retreat.

But… Is this the only way to read the situation at Tyneside? To be fair, most football commentary starts from a rather simple assumption: owners buy clubs to win things, and to win them quickly. Trophies are the visible scoreboard, and spending is the leading indicator of intent. This assumption holds reasonably well for private owners, who are usually answerable to themselves, or to a small circle of investors, for a single asset.

But it holds far less well once the owner is a sovereign wealth fund (SWF) like PIF. Remember, SWFs are usually not return-maximizing investors chasing the performance of one, singular asset. They are instruments of state strategy, embedded in domestic political economies, with mandates that extend well beyond any single club, fund, or sector.

Some Evidence Please

Academic work on the PIF supports such a reframing. The fund is best understood not as a globally roaming collector of trophy assets, but as a domestically anchored vehicle for Saudi Arabia’s Vision 2030 agenda, a long-term program to diversify the Kingdom’s economy away from oil. Its high-profile forays only make sense against this backdrop. LIV Golf (oh oh…), the Saudi Arabian Grand Prix, the WWE (formerly WWF) events are not isolated bets on glamour or vanity.

Domestically, PIF also owns multiple Saudi Pro League clubs, whose recruitment of players such as Cristiano Ronaldo and Karim Benzema serve a parallel purpose (i.e. building the league’s commercial profile).

Seen together, these projects form a portfolio aimed at building visibility, transferring commercial and managerial know-how, and integrating Saudi Arabia into global sport, entertainment, tourism industries that Vision 2030 identifies as growth areas. Newcastle fits this pattern. It is an instrument within the strategy, not the strategy itself.

This distinction matters for how we read the club’s trajectory, because it changes the question we should be asking. Evaluating Newcastle by ‘conventional’ transfer spending or league position each season is like judging an industrial policy by one firm’s quarterly results. It mistakes a component for the whole.

The more useful question is whether the club continues to serve its role within PIF’s broader portfolio. A good guide here is whether the English football (stop calling it soccer!) club remains a platform for visibility, commercial learning, and integration into one of the world’s most sophisticated sporting markets (see this very fun piece by The Economist). On that measure, the picture looks considerably less alarming than recent coverage suggests.

What looks like restraint from the outside is, in large part, consistent with how state capital typically behaves once it operates inside someone else’s regulatory system. The Premier League’s PSR (luckily it will lapse soon) genuinely limits direct capital injections, in a way that simply did not apply during the early, headline-grabbing phase of the takeover. Media and political scrutiny, in Europe, and increasingly at home in Saudi Arabia, impose reputational costs on conspicuously aggressive spending. Given these constraints, gradualism is less a sign of waning enthusiasm than the rational adjustment of a long-horizon investor to the rules of its new environment.

Put differently, the limits placed on Newcastle are not simply an obstacle that the investment must work around. They are, to a significant degree, part of what makes the investment sustainable in the first place. A strategy that openly tested or circumvented these rules would invite exactly the kind of backlash that PIF’s broader sport investments are designed to avoid, and would risk undermining the legitimacy that the whole portfolio depends on.

And Some Broader Context Please

None of this is to wave away the sharper critique that often sits underneath commentaries - sportswashing. The argument that PIF’s sporting projects, Newcastle included, serve to soften perceptions of Saudi Arabia’s human rights record is a serious one. There are also some fairly well-written discussion surrounding this.

Where I would push back gently is on the assumption that such critique and the spending-pattern critique are the same critique. They are not. A club can serve a reputational function for its sovereign owner and, at the same time, behave in financial terms like a long-horizon investor operating within real regulatory limits. Recognizing the latter does not nullify the former and vice versa. Put another way, judging Newcastle’s ‘success’ purely by transfer windows or trophy hauls tells us very little about either motivation. Additionally, doing so risks collapsing two genuinely different debates into (a less useful) one.

Economic history offers useful, if imperfect, parallels for the development logic at work here. Japan’s post-WWII industrial policy did not evaluate individual firms primarily by short-term profitability. Rather, it asked whether they were building the technological capacity the country needed over the long-run. South Korea’s chaebols were given room, and accompanying pressure, to grow into global competitors.

None of these comparisons map perfectly onto a Middle Eastern SWF buying into English football. But the underlying logic, whereby a state-linked vehicle is given a thumbs-up (or down) while underperforming on a metric outsiders consider critical, travels reasonably well.

Now let us go back to Tyneside with a fresh pair of eyes. Newcastle gives PIF direct exposure to the commercial and operational practices of the Premier League, widely regarded as the most commercially sophisticated football competition in the world. Moreover, it provides a recognisable platform for Saudi Arabia’s broader sport and entertainment push, complementing rather than competing with the Saudi Pro League or F1 racing. None of this guarantees success on the pitch, and it was never designed to. A trophy would be a welcome bonus, but it is not the main point.

This is not to say that the current arrangement is free of friction, and fans are right to feel some of it. Many Newcastle supporters were given, implicitly or explicitly, the impression of rapid competitive transformation in 2021, and five years on, that transformation remains partial. Trust me on this, I started liking Man Utd since the Eric Cantona days…

To avoid belaboring the point, the priorities of a SWF operating on a multi-decade horizon and the priorities of a fanbase that wants to win now (or yesterday…) will not always align, and there is no framing exercise that makes that gap disappear entirely. But friction of this kind is closer to a structural feature of this ownership model than evidence that it has failed. It is the predictable result of two different actors, with two different time horizons, sharing the same club.

New Season, New Hope?

Going forward, the more informative signals are unlikely to be transfer fees. Watch instead for whether Newcastle’s commercial operations, infrastructure, and recruitment practices increasingly resemble those of the league’s other major clubs, whether the relationship between Newcastle and PIF’s other sporting assets becomes more synergistic, and whether the club continues to be treated, in PIF’s own disclosures and statements, as part of a broader portfolio rather than a standalone project.

The long mooted expansion of St. James’ Park is one concrete indicator worth tracking. Stadium infrastructure is patient (and very costly!) capital. Similarly, investment in the academy and the women’s team would be more revealing than a marquee summer signing. These are areas where returns are slow and diffuse, and where institutional seriousness tends to show up well before it is reflected in league positions.

None of these development makes for compelling headlines. But they are, analytically speaking, far more diagnostic of whether a long-horizon investor is doing what it said it would do. These are the indicators that would tell us whether the ‘instrument’ framing (inserted somewhere after Roman’s picture at the start) is holding up.

The World Bank and other MDBs have lent tens of billions on this premise. Development economists (or wannabes like yours truly) wrote careers’ worth of papers measuring the returns to infrastructure investment and the like. While the results are rather mixed, the paradigm more or less held. Infrastructure is one of the main entry points to the question of what developing countries most urgently need.

This paradigm has not disappeared. The money emphatically says so. Private participation in infrastructure investment in developing countries reached over $100 billion in 2024, the highest level since before COVID-19, according to World Bank reports. This amount also dwarfs the sum earmarked for critical minerals, another fairly recent ‘hot’ subject. So, don’t believe anyone who claims that infrastructure has been supplanted as the dominant subject of development finance (e.g. critical mineral) - he/she is simply not reading the math correctly.

Yet, something has definitely shifted in recent years. The question that now organizes the most animated conversations in development finance, geopolitical competition, and industrial strategy is not merely ‘where are the roads?’ but ‘where do those roads lead, and whose minerals do they move?’ This shift is not a replacement. Rather, it is a redirection to a new issue. Here, what is seemingly happening behind the scenes is the quiet repackaging of the existing infrastructure dialogue towards a newer strategy (i.e. critical minerals).

But, Sir, They Aren’t Oil

Let us start by defining what we mean by critical minerals. A cursory glance across reports and newspaper headlines suggest that they range from lithium, cobalt, nickel, graphite, to copper. Some even term these materials ‘the new oil’.

The analogy is useful, but also dangerously deceiving. Oil, whatever its geopolitical or socioenvironmental complications, is at least a reasonably well-functioning commodity. It is fungible (i.e. a barrel from Riyadh could substitute for a barrel from Houston with minor adjustments). It is liquid (i.e. futures markets, spot prices, and transparent benchmarks allowed traders to hedge and plan). While the Middle East concentrated supply, other producing nations are at least numerous enough that no single country held a stranglehold on the entire value chain.

Critical minerals are worse on almost every dimension. Many suffer from (extreme) price volatility and pricing mechanisms and industry-wide data are patchy. For battery-grade graphite, gallium, and manganese, one single country (i.e. China) controls over 90% of global refining capacity. For cobalt, the Democratic Republic of Congo accounts for roughly three-quarters of global mining market share, but the ore is then shipped largely to China (not really surprising…) for processing.

And Back to Infrastructure: New (Re)Directions

To be fair, the aggregate numbers in infrastructure lending have not collapsed. If anything, they have grown. What has changed is not the size of the war chest but the gravitational pull that determines where, within it, money flows most readily.

Our good friends at the MDBs will correctly point out that their mining sector lending is additive - new money mobilized for a new purpose, not diverted from existing poverty-focused programmes. They are not entirely wrong. The World Bank still builds schools and water systems and the Asian Development Bank still finances urban transit and rural electrification. These programmes have not been defunded - we must be very precise here.

But, we also ought to be precise about the direction of travel of such money. The World Bank Group’s mining sector lending is set to jump from roughly $3 billion over over FY2021-2025 to an estimated $17 billion over FY2026-2030 - nearly a sixfold increase.

The Lobito Corridor, a railway rehabilitation project connecting the DRC and Zambia to the Angolan coast, offers us another clue. It is increasingly presented as both a development project and a critical minerals supply chain investment simultaneously. It is infrastructure, of course. But it is infrastructure whose political sponsorship, whose bilateral urgency, and whose financing momentum derive much from the fact that it moves cobalt and copper towards Western ports. The project existed on paper for years before the minerals calculus made it ‘interesting’ to prospective funders.

This is the uncomfortable tension alluded to earlier on. A railway in the DRC, previously unjustifiable on development grounds because the country was too risky, becomes more bankable when it is reframed as critical minerals logistics. This also suggests that justifications, at least those coming from the same institutional pipelines, have increasingly shifted from poverty reduction metrics to supply chain resilience metrics. More practically, the infrastructure discourse has not been replaced by the minerals discourse. Rather, it has been ‘colonized’ (pardon my language…) by it.

The Return of Industrial Policy — and the MDBs’ Quiet Conversion

There is another shift happening simultaneously, and it is perhaps the most ideologically significant. For several decades, the Washington Consensus held that industrial policy was at best wasteful and at worst corrupting. The IMF and World Bank exported this view aggressively to developing countries, often attaching conditions to loans that explicitly prohibited the kinds of interventions that had built the industrial economies of East Asia.

To be fair, despite the recent debate around its latest report (which touches on the same topic), the World Bank began walking back its most doctrinaire positions well before the current minerals rush. For example, Justin Lin’s ‘new structural economics’, developed during his tenure as the institution’s Chief Economist from 2008 to 2012, rehabilitated the concept of state-led structural transformation within the institution’s intellectual framework. At a more operational level, there is genuine internal diversity, and some World Bank staffers have been quietly sympathetic to value-addition arguments for developing countries for some years. Hence, the World Bank is not the monolith its critics (yours truly included, on occasions) sometimes portray it as.

But, the shareholder governments that govern these MDBs, and the geopolitical context in which they now operate, have made their moves clear, if one were to be honest.

The US’ Inflation Reduction Act (IRA) is, whatever its authors may prefer to call it, a massive industrial policy program. The EU’s Critical Raw Materials Act represents a fundamental shift from market-oriented approaches towards strategic intervention. The EU’s own EVP stated plainly: ‘Without critical raw materials, there will be no Green Deal, no future technology development in Europe’.

This is not the language of comparative advantage and free trade. It is the language of state intervention, the very lingo that DC and Brussels spent decades instructing developing countries to abandon.

At the same time, both the US and EU are ‘doing a China’. Whatever the critique leveled against the Chinese, the aggregate picture is that there is some awareness rather early on that some folks there understood that the real value in critical minerals lies not in digging them out of the ground but in processing, refining, and manufacturing. These are the the middle and downstream segments of the value chain where margins tend to be higher and strategic leverage is greatest. By the time the West noticed, China was refining 70% of the world’s lithium, 90% of its rare earths, and over 75% of its cobalt.

Whose Industrial Policy Is It Anyway?

So, the revival of industrial policy is real. But, who are the de facto masterminds here? More cynically, is this round of industrial policy designed to enrich the richer countries, but financed by minerals sourced in the Global South?

The IRA’s domestic content requirements were initially designed in ways that excluded mineral-rich developing countries from its benefits. The DRC, which holds more than half of global cobalt reserves, lacked the preferential trade access that would allow its producers to qualify for US clean energy subsidies. Zambia, one of the world’s great copper nations, found itself in the same position. That calculus shifted only when Washington’s competition with Beijing over critical minerals intensified. Even then, the relief came not through rules-based trade access but through bilateral deals struck under the shadow of the DRC’s active conflict, exchanging mineral access for security assurances. The handicap changed form rather than disappeared.

G7 civil servants and MBD staffers will point, not without reason, to counterexamples. The Just Energy Transition Partnerships (JETPs) negotiated with developing nations attempt to link climate finance with genuine industrial transformation. These are not nothing. They represent, at minimum, a rhetorical commitment to value addition that was largely absent from development finance some decades ago.

However, this architecture is being built under constant pressure from the same shareholder governments whose industrial policies are pulling in the opposite direction.

On the other hand, developing nations are not sitting idle. Indonesia banned exports of unprocessed nickel ore in 2020, forcing the construction of domestic smelting capacity and attracting major refinery investment. In a similar move, Namibia banned the export of unprocessed critical minerals (including lithium, cobalt, manganese, and graphite) in 2023. These are acts of industrial policy.

That the Global North finds it genuinely difficult to object is made plain by one particularly clarifying episode: the EU took Indonesia to the WTO over its nickel export ban. In 2022, a WTO panel duly ruled against Jakarta, finding that its ban violated free trade rules. Can one really blame the Indonesians on this episode then?

Additionally, it is worth noting that the MDB response to these export bans has been ambivalent at best. I really don’t know what to make of this ambivalence, apart from conjecturing that this stems partly from staffers who see such policy moves as legitimate development strategy and governance structures beholden to shareholders who prefer unimpeded mineral flows.

The New Development Bargain

What we are witnessing, then, is that infrastructure money remains large and, in aggregate, still reaches well beyond the minerals sector. But the political zeal, the bilateral urgency, and the most rapidly growing category of development finance is increasingly oriented around minerals.

The old infrastructure bargain was - we will lend you money to build roads and dams, and in return you will liberalize your markets. The new critical minerals bargain operates through similar financial instruments and institutions, but the underlying deal has been amended. It now reads closer to this: ‘We will prioritize financing infrastructure that connects your mineral deposits to global supply chains, and in return you will give us preferential access to what we need for our energy transition and our industrial strategy’.

Whether this new bargain is better for developing countries than the old one depends almost entirely on whether they can leverage their geological endowment. In other words, can you meaningfully cultivate long-lasting value addition (e.g. processing, manufacturing, downstream industries) rather than simply exporting raw ore at the bottom of the value chain?

Resource booms have a persistent tendency to deliver enclave-ish development: infrastructure that connects mines to ports, wealth that accumulates in capital cities and offshore accounts, and populations that remain poor. However, it would be naive to not devise some strategy around this juncture. This is, objectively a genuine opportunity to break this pattern.

Some MDB staff understand this, and some programmes reflect it. But opportunity and outcome are not the same thing. The tools for capturing value-added are well understood — export restrictions, domestic processing requirements, joint venture mandates, technology transfer conditions. These are not exotic interventions. They are the instruments that every currently rich country used, at one point or another, to build its industrial base.

Therefore, the real constraint is not analytical. It is political: whether mineral-rich developing countries have the bargaining power and the institutional support to insist on these terms, against shareholder governments whose industrial policies are simultaneously designed to capture the same value upstream. The track record here by developing nations is not great - a quick Google search is all that is needed to verify this point.

None of this is an argument for resignation. Developing nations hold genuine leverage, perhaps more than at any point in a generation. The world’s EVs, wind turbines, data centres, etc. all depend on minerals that are, in significant measure, sitting beneath African and Southeast Asian soil.

But leverage is not destiny. Indonesia’s nickel gambit worked, in part, because it was executed with sufficient scale to make the global supply chain flinch. Not every resource-rich nation commands that kind of market power. Furthermore, navigating multilateral rules on export restrictions, trade conditionality, intellectual property is daunting for any developing country.

The geology was never the problem. For too long, the problem was who got to decide what it was worth. That calculation is now, finally, being contested. How far the contestation goes depends less on the minerals themselves than on whether the nations that hold them can convert geological fortune into genuine industrial power.

It is a compelling story. But, it is, errr, kinda wrong.

The Geopolitical Reading and Why It Seduces

The instinct to read sovereign wealth fund (SWF) activities through a geopolitical lens is understandable. When state capital from supposedly illiberal regimes flows into Western football clubs, semiconductor firms, or luxury brands, it is tempting to see a grand strategic chessboard at work.

One needs little reminder about how certain governments treat Gulf and other Asian SWF investments as presumptive national security threats, tightening screening mechanisms and generating diplomatic friction in the process.

But this reading confuses effects with intentions. Yes, geopolitical consequences follow when a SWF buys a football club. Soft power accrues. Diplomatic leverage shifts. Host governments pay closer attention. Yet, none of this means that geopolitical effect is the sole or primary purpose of the investment.

Three Cases, One Argument

Consider three very different SWFs: Saudi Arabia’s PIF, Kazakhstan’s Samruk-Kazyna, and Malaysia’s newly established Sarawak Sovereign Wealth Future Fund. What we find is that the core logic driving their investment decisions is overwhelmingly domestic, not geopolitical.

Take the PIF, for example. To understand what it is doing overseas, we first need to understand what Crown Prince Mohammed bin Salman (MBS) is trying to do at home. Vision 2030 — the sweeping transformation agenda launched in 2016 — is the organizing logic behind virtually everything the PIF touches.

Despite its wealth, Saudi Arabia faces several interlinked structural problems: an economy overwhelmingly dependent on hydrocarbon revenue, a rapidly expanding young population, and a public sector no longer capable of absorbing job-seekers it once could. These concerns are the primary driving force behind Vision 2030’s goal of diversifying the Saudi Arabian economy away from oil. It is also fair to say that none of these have any direct relationship with foreign policy formulation.

As for the Newcastle United acquisition, it is not principally about projecting Saudi power into Britain (or even Europe). Rather, it is about building the sports and entertainment ecosystem, amongst other things, that Vision 2030 requires. Put simply, the geopolitical optics surrounding the Newcastle United deal are a byproduct, not the strategy itself.

Kazakhstan’s Samruk-Kazyna tells a similar story. Critics have read its partnerships with Chinese state-owned enterprises (SOEs) under the Belt and Road Initiative as a conduit for Beijing’s influence, which indirectly strengthens Kazakhstan’s supposedly illiberal political environment. On closer inspection, these collaborations largely emerged from firm-level commercial logic and from Astana’s longstanding strategy of balancing relations between major powers. Samruk-Kazyna’s core function remains domestic: managing an economy dangerously dependent on natural resources and overseeing SOEs deemed too strategically significant for private markets.

The Sarawak case is perhaps the most instructive of all, precisely because it has almost nothing to do with Malaysia’s posture in the world and everything to do with a long-running contest for power within it. When Sarawak joined the federation that became Malaysia in 1963, the East Malaysian state was promised meaningful autonomy over its natural resources. Over subsequent decades, those provisions were progressively chipped away. Thus, the Sarawak Sovereign Wealth Future Fund is best understood as an act of institutional assertion whereby Sarawak reclaims in financial form what it lost through federal dominance. In essence, this is a domestic political contest wearing the clothes of international finance (or even geopolitics…).

Why Getting This Wrong Is Costly

This is not merely an academic debate. The reflexive securitisation of SWF activity carries real costs. When Western governments treat SWF capital from the ‘Other’ as presumptive national security threats, they distort capital markets, invite reciprocal restrictions on their own funds abroad, and push investment toward less transparent structures. They also misallocate diplomatic energy, treating as geostrategic what is often simply commercial.

Left unchecked, the securitisation impulse risks becoming self-fulfilling. The more aggressively SWFs are framed as geopolitical weapons, the greater the incentive for their managers to behave accordingly.

The Real Game

SWFs are, at their core, state-capital instruments rooted in domestic political logic. They exist because governments have accumulated wealth — often through hydrocarbon and trade surplus — and require a vehicle that serves long-term national interests. Those interests are almost always primarily about the home economy: employment, economic resilience, fiscal diversification, and even the political survival of incumbent elites (shhh…).

Football clubs, golf tours, and wrestling events lend themselves to vivid headlines. But the real game is being played closer to home. They are embedded in budget negotiations, constitutional disputes, and industrial policies.

Understanding that distinction is not just analytically important. It is the difference between good policy and expensive misreading.

Disclaimer: This article draws on research co-authored with Wellington N.K. Aweke (GRIPS/Ministry of Finance, Ghana) and Linda Yin-Nor Tjia (City University of Hong Kong), published in the Journal of Asian Public Policy and summarized in Ghana’s The Business & Financial Times.

Yet, it is also important that we extend the insights to the other components of the economy. Here the term ‘resilience’ needs some scrutiny, if one is to better grasp Africa’s present condition and future trajectory. Framed too narrowly, resilience risks becoming a descriptive endpoint rather than a starting point for deeper inquiry into structural transformation, political incentives, and the distributional consequences of adjustment.

Resilience as Description, Not Explanation

Ken locates Africa’s improved performance in three familiar angles: better macroeconomic management since the 1990s, expansion of the informal private sector, and greater diversification of trade partnerships. These are important shifts.

But resilience, in this telling, is largely observational. It also implies that the underlying fundamentals undergirding the African economies have improved. The reality is, many economies can absorb shocks without meaningfully altering their position in the global division of labor. Indeed, one might argue that resilience, as currently constituted, reflects the capacity to adjust at the margins (e.g. exchange rate depreciation and ad hoc cash handouts) instead of a concerted shift towards capability-transforming, productivity-enhancing structural change.

In other words, resilience may be less about actual strength than about flexibility under constraint.

Better Macroeconomic Policies, but for Whom?

Ken is right to emphasize improved macroeconomic policymaking since the 1980s/1990s. But, the political economy underpinning such improvement deserves closer attention. Much of Africa’s macroeconomic ‘credibility’ is embedded in institutional arrangements that prioritize price stability and external balance over more concrete development ambition. Phrased differently, independent central banks, and externally anchored frameworks might have reduced volatility, but they have simultaneously narrowed the scope to push industrial policy.

Once again, history is a good teacher. Today’s advanced economies did not industrialize under conditions of strict macroeconomic orthodoxy or premature exposure to global competition. They deployed tariffs, subsidies, directed credit, and, at times, outright protectionism to nurture infant industries. By contrast, many African economies have been encouraged, or even forced, to liberalize early, often before their domestic firms acquire the capabilities necessary to compete at the regional/international level.

The result is a paradox: stronger macroeconomic institutions coexisting with weaker productive structures. Stability has been achieved, yes, but what at what price to the real economy?

Informality as Buffer or Constraint?

Ken also rightly highlights the vibrancy of Africa’s informal sector as a source of resilience. There is no doubt that informality provides a crucial buffer during downturns. It absorbs labor, sustains consumption, and enables adaptation in the face of shocks. During the COVID-19 pandemic, informal networks (in Africa and elsewhere) proved more responsive (and often more humane) than formal state mechanisms.

Yet, informality is a double-edged sword. Its flexibility is inseparable from its limitations: low capital intensity, weak access to finance, and minimal technological upgrading. While it mitigates the immediate impact of crises, it can also lock economies into a low-productivity equilibrium.

For example, manufacturing’s share of GDP and employment has stagnated or even declined at relatively low levels of income. Workers are moving not into factories, but into low-productivity services - retail trade, transport, personal services - often within the informal economy. This is not the kind of ‘servicification’ observed in advanced economies, where high-value services build on a strong industrial base. It is, instead, a structurally constrained shift into activities with limited scope for skills and productivity growth. One way to demonstrate this is by benchmarking Africa against the major economies, which I did using statistics from the International Labor Organization.

The central challenge is not to eliminate informality, as it is both impractical and counterproductive, but to create pathways for firms and workers to transition into more productive activities. Without such pathways, resilience risks becoming a mechanism of containment. A cursory look across the continent suggests that Ethiopia might have captured some gains on this front, with an almost threefold increase in (expected) export revenue (but let’s check the figures again in a few months…).

Diversification without Deepening?

Ken’s third anchor - greater diversification of trade partners and the rise of intra-African trade - is arguably the most forward-looking. The expansion of economic ties beyond traditional colonial partners, particularly toward Asia and the broader Global South, has undoubtedly reduced vulnerability to single market shocks. However, is it as deep or extensive as the popular imaginary?

While a bit dated (taken from p.64 of Cramer et al 2020), the twin figures below show that Sub-Saharan African share in global exports has remained generally low for at least 20 years. It only looks somewhat better when primary commodities are counted, but not by much.

There is another catch - diversification in partners does not automatically translate into diversification in products. Many African economies remain heavily reliant on primary commodities, even as their export destinations have multiplied. Trade with emerging partners often reproduces existing patterns, that is raw materials flowing out, manufactured goods flowing in.

A good example of this would be Ghana (yes, thank the Ghanaians for giving you chocolate; I am enjoying one as I type). The figures below (generated from the Observatory of Economic Complexity) are telling not only for how similar they look, but also how the absolute export revenue has shrunk.

When it comes to intra-African trade, there is similarly little evidence to support optimism. Once again, I am drawing on slightly dated data (taken from p.65 of Cramer et al 2020).

This is not to say that we should not promote agreements like the African Continental Free Trade Area (AfCFTA). But, one needs to concede that there is much room to improve. Also, FTAs should ideally support industrial deepening rather than merely facilitate the exchange of existing goods. Without complementary industrial policies, infrastructure investment, and regional value chain development, intra-African trade may still expand, but it is unlikely to meaningfully transform production structures.

Conclusion: From Just Surviving to Structural Transformation

Ken ends with a call for external actors to recalibrate their engagement with Africa, especially eschewing the imposition of top-down reforms. Some initiatives include supporting household welfare and currency stability. All of these are sensible.

But are they sufficient?

An economy that repeatedly absorbs shocks and bounces back to the same low-capability, -productivity equilibrium has not advanced. All it has done is merely enduring or surviving. There is a lot to be admired here, of course, but where is the long term plan?

What is needed is a deliberate pivot. This means taking seriously the question of industrial policy. It is not a relic of the past, but a historically validated instrument that every now-developed economy deployed in its own ascent. The World Bank’s recent softening of its earlier stance can only help Africans to more purposefully push for change.

Africans have proven, repeatedly and under extraordinarily difficult conditions, that they can survive. The task now is to build economies worthy of that resilience.

Then the narrative flipped. Deals unraveled. Owners withdrew. What once looked like the beginning of a new era came to resemble a short-lived boom. The common explanation is straightforward: Chinese firms misjudged football. Some overpaid, others borrowed too aggressively, and several were later constrained by tighter capital controls at home.

These explanations, however, overshadow the root of the problem. Chinese investors entered European football only after it had matured into one of the most complex and competitive businesses in global entertainment. Here, success depends less on capital alone than on accumulated know-how, institutional depth, and long-term strategy.

The Logic Behind the Buying Spree

To be fair, Chinese conglomerates were searching for internationally recognizable brands at a moment when domestic growth was decelerating, especially after the 2015 stock market crash. Diversifying into sports, entertainment, and media appeared to offer pathways for instant global visibility, access to consumer markets, and cultural influence.

Additionally, Chinese President Xi Jinping expressed his ambitions for China becoming a ‘world football superpower’. Investments into the sport were being encouraged and overseas football club purchases also appeared to align with national aspiration.

Chinese investors went from owning virtually nothing to becoming the largest foreign investors in European football in the span of just 30 months, owning stakes in more than 20 clubs by its peak in 2017.

Yet beneath the spectacle of European football lays an industry that had evolved into a complex ecosystem built around media rights, commercial partnerships, and sophisticated debt structures. Clubs were no longer merely sporting institutions. They were volatile entertainment assets whose success depended as much on balance sheets as on results on the pitch.

The Reality They Faced

In 2016, Suning Holdings acquired a controlling stake in Italian club Inter Milan, delivering great on-field success, including winning the Serie A title in the 2020-21 season. However, with financial pressure slowly building, Suning obtained a €275 million loan from Oaktree Capital Management, collateralized against its ownership stake. When the loan matured in 2024 and could not be refinanced, Oaktree assumed control.

Across town, rivals AC Milan met a similar fate. In 2017, Chinese businessman Yonghong Li purchased the club using financing from American hedge fund Elliott Management. When repayment difficulties emerged 15 months later, control of the club shifted rapidly to the lender. The episode revealed how fragile football investments can become when debt structures outpace operational stability.

Politics at home didn’t help firms either. Beginning in 2017, Beijing tightened scrutiny of overseas acquisitions deemed speculative or prestige-driven, which included the sports sector. While these measures did not immediately threaten day-to-day operations, they significantly reduced the financial flexibility of Chinese owners when problems emerged.

Then came the COVID-19 pandemic. Empty stadiums and disrupted broadcasting revenues revealed how precarious many clubs’ finances had become. What once looked like glamorous assets became financial sinkholes. For late entrants, the timing could hardly have been worse.

Of the over 20 clubs with Chinese ownership stakes in 2017, the Chinese have more or less pulled out of all of them except three (AJ Auxerre, Granada CF, Wolverhampton Wanderers).

Last Man Standing?

One Chinese investment has proven more resilient than most: Fosun International’s ownership of English outfit Wolves. What distinguishes this case is not simply better management, though that matters. Rather, it reflects a different strategic approach.

Fosun entered the football business cautiously, acquiring a lower-profile club and pursued promotion to the English Premier League (EPL). It built a recruitment model focused on undervalued players and integrated the investment into a broader international portfolio. They focused on developing a self-sustaining financial model, resembling portfolio management more than prestige acquisition.

However, although financially resilient, a self-sustainable business model such as Wolves’ is difficult to maintain in the topflight of English football. At the time of writing, they have been relegated from the EPL, which fans and critics blame on Fosun’s underinvestment into club infrastructure and player recruitment, leading to executive chairman Jeff Shi to step down in late 2025.

A Broader Economic Lesson

The rise, and partial retreat, of Chinese investors reflects a deeper structural shift within European football. Today, the sport is increasingly dominated by three powerful ownership models.

The first consists of diversified corporate groups such as INEOS, which approaches sport with industrial management discipline and cross-portfolio expertise. A second group includes private equity investors comfortable navigating complex capital structures and extracting value from volatile assets. The third involves sovereign-backed ownership, seen at clubs like Paris Saint-Germain and Newcastle United, where financial scale and long investment horizons operate on an entirely different level.

The Chinese experience illustrates the challenge of late entry in economic development. Industries that appear accessible are often protected by decades of accumulated knowledge and capabilities, something money can’t easily replicate by itself.

This is an important aspect regarding globalization. An open market doesn’t entail a neutral one. Firms entering established markets overseas must overcome informational gaps, regulatory constraints, and entrenched competitors.

Seen this way, Chinese investment in European football is less an anomaly than a case study in how global industries evolve. It shows how globalization rewards investors who combine financial resources with patience, expertise, and organizational depth. Football merely made the lesson unusually visible.

The implication is not that Chinese investment in the sport will vanish. Rather, the next phase, if it emerges, will likely be more cautious. Investors will approach football less as a prestige asset and more as a specialized industry requiring long-term capabilities.

In that sense, the real story of Chinese ownership in European football is not about failure. It is about learning – albeit an expensive form of it.

*: This essay is partly based on Guanie and Allan Nylander’s recent working paper, titled ‘Chinese Owners in European Football: New Money, New Mistakes?’, published in GRIPS Discussion Papers.

Essentially, the paper is about Malaysia’s response to China’s Belt and Road Initiative (BRI). At its heart lies a fairly simple disagreement with the prevailing mood in academic/media/policy circles at the time. That is, smaller (usually also weaker) countries are essentially powerless when China arrives with its infrastructure money and geopolitical ambitions. We thought that was too convenient an answer (but were laughed off fairly regularly then).

To cut a long story short, the BRI - announced by Chinese President Xi Jinping in 2013 - is China’s foremost diplomatic and economic strategy to connect Europe, Africa, and Asia through various hard and soft infrastructure. Investment associated with it has also apparently surpassed a trillion US dollars. For many developing countries, the offer is very attractive: funding and expertise for projects that might otherwise take decades to materialize. However, concerns about debt dependency and political leverage are equally real.

Malaysia struck us as a particularly rich case. It has a long relationship with China (formal diplomatic ties since 1974), an ethnic Chinese minority comprising roughly a quarter of the population, and a government that is generally enthusiastic about connectivity. But Malaysian politics is deeply layered in ways that outsiders often underestimate. A longstanding affirmative action policy shapes nearly every major economic decision, favoring the ethnic Malay majority (at least on paper). Federal and state governments frequently pull in different directions. Political elites are also challenging to read as they plot their own survival.

Then we focused on three major Chinese-financed projects. The East Coast Rail Link (ECRL) - a 600++km railway connecting the poorer east coast states to the wealthier west, contracted to a Chinese state firm and largely financed by Beijing. Bandar Malaysia - a large mixed-use development in central Kuala Lumpur, entangled with a government fund (1MDB…) at the center of what would later become one of the country’s worst scandals. Lastly, there is Forest City - four artificial islands near the Singapore border, in partnership with local elites.

The three projects went in very different directions. ECRL was fast-tracked because it aligned well with Malaysia’s pro-Malay economic agenda - the railway passed almost entirely through ethnic Malay-majority states - and because it served a genuine Chinese strategic interest in reducing dependence on the Strait of Malacca. State and federal governments were broadly supportive. The conditions for cooperation were there.

Bandar Malaysia fell apart. The scandal surrounding the 1MDB made it politically toxic. And when Chinese negotiators pressed for concessions, Malaysian officials drew a line. The deal collapsed just days before the inaugural BRI Summit in Beijing in May 2017, a timing that was almost certainly deliberate.

Forest City ran into a different set of problems. Former Prime Minister Mahathir made it a political issue, raising fears about Chinese nationals settling permanently in Malaysia. The occasionally tense relationship between Johor and the federal government added further friction. Furthermore, Beijing’s own capital controls, introduced to curb outflows, effectively cut off the project’s main buyer base.

What emerged from these three cases was a framework with three conditions: BRI projects tend to succeed when they accommodate Malaysia’s domestic ethnic politics, when state and federal governments are aligned rather than at odds, and when both sides can identify a genuine shared interest. Remove any one of these, and the project struggles.

What gave us some confidence in this argument was that events continued to unfold in ways consistent with it. When Mahathir won the watershed 2018 general election and subsequently deferred ECRL, the decision was driven not by Chinese pressure but by Malaysian political calculations. Here it is clear that he wanted to distance his then new administration from his predecessor’s legacy.

Perhaps that is why the paper has continued to find readers. The argument was never really about Malaysia specifically, or even about China. It was about how international deals actually get negotiated i.e. through the friction of local politics, competing interests, and contingency. The view from the ground tends to be more complicated, and more interesting, than the view one gets from the media (or your uncle/auntie on WhatsApp and the like).

As the chapter and the rest of the edited volume is paywalled, I thought it might be good to share some of the findings here.

First and foremost, growth has been quite rapid since the 1986 Doi Moi (Renovation) reforms. I won’t bother listing the usual statistics here (e.g. plummeting poverty rates and increasing export revenue) because one only needs to visit the country to feel and observe the clear improvements.

However, the relevant question is not whether Vietnam looks more prosperous than it did in 1986 - it clearly does. The question is whether the structure of its growth is generating the kinds of domestic productive capabilities that allow an economy to sustain high-income status in the long run.

On this front, the picture is more ambiguous. Here it is worth noting that Vietnamese growth has entered a gradual but discernible slowdown. This is of course not immediately visible to the casual visitor, but it is statistically demonstrated elsewhere (including but not limited to one of my older works). To be fair, part of the reason behind this ‘stereotypically positive’ vibe about the Vietnamese story is not entirely related to Vietnam itself. Compared to some of its neighbors, Vietnam still appears rather dynamic, so it is not entirely wrong to point to Vietnam as the region’s ‘rising star’ of sort. Certain media outlets have also apparently made it a habit to ‘hype’ Vietnam up, describing it as a so-called ‘connector economy’ - a country well positioned to benefit from the reorganization of supply chains amid US–China tensions.

The point is, insertion into global value chains is not the same thing as moving up them…

A Quick and Dirty Test

There is a simple way to assess whether a developing country is on track to become a genuinely advanced economy: examine the capabilities of its domestic firms. Do its national firms develop and internalize the skills, technologies, and organizational competencies required to compete in technologically complex, export-oriented industries? Or do they remain concentrated in low-complexity activities with limited scope for learning and upgrading?

Without a sustained expansion of domestic capabilities in higher value-added industries, developing nations like Vietnam risk remaining efficient production platforms rather than becoming innovation centers. This is the essence of what is often called the ‘middle-income trap’: growth driven by cheap labor, foreign capital, and imported technology eventually runs out of steam unless domestic firms climb the technological ladder.

Vietnam’s export performance, impressive as it is, offers us some clues. FDI enterprises account for a staggering 74.2% of Vietnamese exports, up from 47% in 2000. This is not inherently problematic. Foreign firms can play a vital role in technology transfer, employment generation, and integration into global markets.

However, the bulk of these export activities are taking place in enclave-like ecosystems, meaning that domestic suppliers often occupy lower tiers of the value chain, with limited control over design, branding, or advanced engineering.

Beyond States and Markets

What about Vietnam’s state-owned enterprises (SOEs)? Historically and politically, SOEs are expected to play a leading role in industrialization. In theory, they could act as vehicles for coordinated investment and technological upgrading, especially in strategic industries.

In practice, the picture is less encouraging. A review of Vietnam’s largest companies by revenue between 2012 and 2023 reveals that only two manufacturing SOEs consistently appeared in the top 10: Saigon Beer Company and Vinamilk. Both are quite profitable, but both also operate in relatively mature, low-technology segments of the agrofood industry. Moreover, the bulk of their revenues derives from the domestic economy rather than technologically demanding export markets. This is not to dismiss their achievements, however. Building nationally competitive consumer brands is no small feat (think Indonesia’s Indomie and Malaysia’s OldTown White Coffee). But from the perspective of structural transformation, these industries offer limited scope for the kind of cumulative technological learning associated with late industrialization success stories.

What, then, of Vietnam’s private firms, so often celebrated as the nimble, market-driven counterweight to the lumbering SOEs? At first glance, their trajectory appears encouraging. Only FPT, Hoa Phat Group, and Masan Group hail from the private sector in the 2012 roster. In the years that followed, that number rose, especially in the upper half of the top 10 list. Superficially, this seems to signal a structural shift - the rise of domestic private capital within Vietnam’s corporate hierarchy.

But, we must be careful not to mistake numerical presence for structural transformation. Much like their SOE counterparts, Vietnam’s leading private conglomerates are concentrated in industries characterized by low technological complexity and limited room for export growth such as wholesale and retail trade, finance, and real estate. More critically, these are industries where technological spillovers are thin, and productivity gains tend to plateau quickly.

One can of course become nationally prominent billionaires by mastering these activities. But they do not, by themselves, drive globally competitive capabilities. From a development perspective, what matters is whether firms are embedded in industries that offer scope for technological upgrading, export dynamism, and sustained productivity growth. Despite the fashionable claim that we now inhabit a ‘knowledge-based’ services-driven economy, such dynamic opportunities remain overwhelmingly concentrated in manufacturing, as shown elsewhere.

A Quick Northern Detour

A brief comparison with the corporate landscapes of the advanced East Asian economies is instructive. In countries such as Japan and Korea, the largest firms by revenue have historically been anchored in manufacturing activities with deep technological know-how. Even in 2023, the manufacturing presence in Japan and Korea remains noticeable (see the next two tables).

Although some of these manufacturing firms such as Mitsubishi Corporation and Samsung are also involved in related activities such as trading, virtually all of them had (or continue to have) a manufacturing core. Moreover, they are synonymous with original brand name goods that are proprietary to their manufacturing businesses.

For those unfamiliar with the economic history of Japan and Korea, these two nations, unlike Vietnam, did not simply attract foreign investment and assemble imported components. If anything, both have, at least until recently, avoided FDI in key parts of the economy. They instead deliberately cultivated national champions in industries characterized by high entry barriers, steep learning curves, and strong export potential.

And Back to Vietnam

Having said that, none of the above negates Vietnam’s achievements. Sustained growth over several decades is an extraordinary accomplishment, especially given the country’s starting conditions. Nor does it imply that Vietnam is doomed to stagnation. Industrial upgrading is a gradual process. But it does suggest that the current growth model may have inherent limits.

Export expansion driven by multinational corporations can boost GDP and employment. A vibrant domestic private sector can energize services and construction. However, without a systematic push to deepen domestic technological capabilities in tradable, high-value industries, the economy risks plateauing at an intermediate level of income.

The Vietnamese case thus reminds us of a broader lesson in development economics: the market can generate entrepreneurs, but it does not automatically generate industrial transformation. Rather, it requires deliberate policy choices: strategic coordination, targeted support for learning-intensive sectors, and institutional mechanisms that discipline firms while encouraging long-term investment.

The central challenge for Vietnam, therefore, is not whether it can continue to attract foreign capital or expand private enterprise. It almost certainly can. The challenge is whether it can foster a new generation of domestic firms that design, engineer, and brand, rather than merely assemble or build condominiums.

Until that shift occurs, Vietnam’s impressive growth story will remain incomplete. The country may continue to be hailed as a ‘rising dragon’, ‘new China’, or ‘connector economy’ in a fragmented world. But the real test of development lies deeper: in the quiet accumulation of technological capabilities within domestically rooted firms. That is a slower, more demanding process. It is also the only reliable path to sustained prosperity.

Thus far, Manchester United has won all three games with him in charge, leading to some positive vibes at the club again.

However, points are only part of the story. In fact, they may not even be the most important part. To understand Carrick’s role - and how his tenure will really be judged - we need to ask a more basic question: what is an interim head coach actually hired to do?

Stabilizing the Environment

Firstly, Carrick has quickly stabilized the environment. Apart from the wins thus far, there have been no public player unrest, no tactical chaos week-to-week, and no dressing room leaks.

In elite clubs, chaos tends to compound itself. Hence, stopping the bleed is often harder than winning the next match. On this metric, Carrick has done quite well.

Restoring Football Order

United now look ‘simpler’. Roles are clearer, principles are pared back, and the team appears harder to beat even when it is not especially dominant.

This supposed ‘reduction’ is not bad. Indeed, it is often what teams need after periods of ideological overload. Whether this version of United can sustain results over time is an open question. For an interim, that is not the point. The objective is coherence, not transformation.

Knowing and Toeing the Line

Carrick has done well to avoid talking up his future at the club, preferring to leave no fingerprints (at least to outsiders like yours truly). It is all too easy for an interim to overstep the boundaries when the mood in the club is positive (usually after a few wins). Fans, understandably emotional, tend to amplify this error.

The positive sign is that Carrick has not crossed the line. That restraint matters.

Preserving Asset Value

Because of the upward tick in form , asset value (i.e. player value) seems to have been preserved. Some important players have also been brought back into the fold, which helps the club should any future transfer be contemplated.

A functioning interim does not just manage a squad - he safeguards the balance sheet.

Gathering Information - THE REAL JOB?

This is arguably where interim tenures are most misunderstood and I only wish there were more discussions on this topic, at least to prove me wrong…

As far as a layman like me is concerned, I suspect Carrick’s most important task is not on the touchline but further upstream. He is, in effect, a high-grade information gatherer for the senior executives. He is expected to feed the likes of Jason Wilcox and Omar Berrada with insights that cannot be captured by data alone:

• Who trains well vs who coasts?

• Who buys into structure vs resists?

• Who can adapt to multiple systems?

• Who is coachable under stress?

This information, if and when gathered properly, shapes summer exits, contract decisions, and even next coach/manager profiling.

None of the above happens on camera. It happens on training pitches, in corridors, after matches rather than during them. That is why TV or YouTube discourse, obsessed with formations, selections, and weekly point totals, misses the substance.(one does not need to watch much of Gary Neville and Jamie Carragher to see the limitations here…).

The Ugly Truth

Ultimately, a bad interim can win games and still fail. A good interim can lose games and still be invaluable.

So, if I was INEOS, I would not be asking how many points Carrick will deliver. Rather, I would be asking whether the club has learned the right things from his tenure, clearly, systematically, and without noise.

If that happens, then even the chaotic sacking-Ten Hag-to-get-Amorim-before-realizing that-they-both-aren’t-up-to-scratch circus may yet yield something of value. More importantly, it would mark another small step toward Manchester United behaving like one of football’s serious institutions rather than one of its most dramatic ones.

For a club trying to rediscover competence, that may be the most meaningful outcome of all.

Usually from that uncle or auntie in your WhatsApp, WeChat, or LINE group: ‘Japan is finished’.

It’s no longer the key economic player in Asia. Overtaken by China. Maybe even by Korea.

At first glance, this narrative sounds convincing. China’s rise is dramatic, visible, and endlessly reported. Korean firms are aggressively expanding. Japanese companies, by contrast, rarely make headlines anymore.

However, in economics, as in geopolitics, influence is often strongest when it becomes boring. When it is routinised. Embedded. Part of the everyday economic landscape rather than tomorrow’s breaking news.

That is precisely the case with Japan in Southeast Asia. If you have a few minutes, my recent op-ed with Nhat Anh (kindly published by Nikkei) looks at this issue through the lens of Vietnam.

If you have a little more time, here’s another simple chart that highlights the point even more clearly.

This chart, compiled with brothers Chengwei and Binh and published last year at the Asia Europe Journal, tracks FDI entering Vietnam over a 23-year period.

And no, your eyes are not deceiving you: Japanese firms remain among the largest investors in Vietnam (mean of 15.33%).

What often confuses observers is that the dollar value of FDI flows and long-term economic presence are not the same thing.

China and Korea look dominant in recent years because their investment flows have been large, and even quite flashy. Go visit the area around Hanoi’s Lotte Tower to get a vibe of what we are saying here.

Japan’s pattern is quite different. Japanese firms invested earlier, more steadily, and across business cycles, especially in the years following Vietnam’s 1986 Doi Moi reforms. Some years saw major surges; others were more restrained. But over two decades, that consistency adds up.

So, when you zoom out, Japan’s cumulative share of FDI in Vietnam ends up slightly higher than Korea’s, despite far less fanfare. This matters because long-term economic influence is not just about who shows up last (and in an over the top manner?). It’s also about who helped build the production networks in the first place. Much of this is invisible precisely because it has become normal. Factories run. Supply chains function. Firms stay.

Indeed, there is a certain irony in the Vietnamese perception of Japanese decline. Consumers who voice it often do so while riding Japanese motorcycles (Honda and who else…), and eating noodles (Hao Hao, anyone?) produced using Japanese technology. Workers who believe Japanese firms are fading frequently earn their living in Japanese Tier-1 suppliers or factories equipped with Japanese machinery.

So when people (e.g. that uncle/auntie of yours) talk about Japan’s ‘decline’ in Southeast Asia, what they are often noticing is not absence, but maturity. Japan is no longer the newcomer announcing itself with splashy investments. It is the incumbent whose role has become embedded in how regional economies actually work.

Therefore, if we are serious about understanding economic power in Southeast Asia, we should spend less time chasing the loudest flows, but more time looking at the structures that quietly endure.

INEOS, which acquired close to 30% of Manchester United in late 2023, has wasted no time in searching for Amorim’s replacement. Within days, bookmakers have installed several early favorites, including well-known figures such as Enzo Maresca and Gareth Southgate. Such news raises familiar hopes – these coaches come highly regarded, with a reputation that echoes the enthusiasm that greeted Amorim’s (and those before him) own arrival not so long ago. But if Amorim’s early promise fizzled out, why should the next candidate fare differently?

The managerial/head coach carousel reveals deeper questions about Manchester United’s challenges since the 2013 retirement of its legendary manager, Sir Alex Ferguson. Can the next person bring the sustained revival fans yearn for, or will he find himself bound by the same organizational flaws that have claimed so many before him?

The uncomfortable reality is that match-day performances often reflect much larger, deeper factors within a club. One issue (and there are many more!) INEOS quickly sought to address was the youth development system. While neighboring rivals Manchester City have drawn criticism for supposedly bending fair play rules due to substantial financial backing from Middle Eastern investors, it is undeniable that a significant portion of the largesse has been effectively invested in the academy.

Unlike Manchester United, who used to dominate youth competitions, Manchester City has become the leader in this regard. Manchester City academy players have won four out of a possible 12 titles in the Under-18 Premier League since its revamp in 2012, far surpassing Manchester United’s solitary title in the same period. This success is evident in the popularity of Manchester City youth products, such as 23-year-old Cole Palmer, who joined Chelsea in 2023 and has arguably been one of the best English players over the past 24 months. Players like Palmer are highly sought after for their technical prowess, coordination with teammates, and generally high footballing IQ.

In contrast, Alejandro Garnacho, Manchester United’s (once) supposed prodigy, relies more on speed and other physical attributes. While these are desirable traits, they arguably do not equate to a high footballing IQ, which has become increasingly crucial as the game has evolved over the last decade. Garnacho is not an isolated example. Marcus Rashford (who technically is still a United player), several years his senior, has also struggled to step up (at least in his last years at the club). Their lack of consistency, although not intentional, is surely one of the factors contributing to Manchester United’s poor performance under Amorim (and those before him). More worryingly, their underperformance symbolizes a broader issue: an outdated academy strategy that fails to equip players with the vision and tactical awareness today’s game demands.

While it may be too late to retrain the two kind folks, INEOS has made some positive strides in the academy since its partial acquisition of Manchester United. It has, for instance, signed several highly-rated young talents (e.g. a certain Mr Heaven), fending off competition from other elite clubs – a feat that would have been unlikely in the pre-INEOS era. The next task is to continue this trend consistently and to more closely integrate the academy with the first team.

The point is, real and consequential changes often occur subtly, developing quietly in the background and requiring a lengthy, disciplined process to manifest. Unlike the dramatic, quick fixes that fans often hope for, these shifts are built through consistent, steady efforts that may not yield visible results in the short term. The path to substantial improvement in a football club, especially one that aims to reclaim its status among the elite, requires addressing foundational aspects that may appear ‘boring’ or mundane to the casual observer but are essential for long-term success.

For supporters who genuinely care about the club’s well-being, it is crucial to avoid being swept up in momentary emotions, whether from wins or losses, new hires, or high-profile player transfers. Knee-jerk reactions and impulsive demands for immediate results often lead to short-sighted decisions, including but not limited to signing marque players (or even coaches) who do not fit well with the system, that can derail progress.

Instead, fans who understand the importance of steady, gradual improvement are in a better position to truly support the club’s journey. By tempering their expectations and exercising patience, they can contribute to an environment that allows for real, sustainable growth, rather than constant upheavals.

Moreover, the top executives brought in by INEOS have acknowledged that substantial improvement is a multi-year process. CEO Omar Berrada’s (yes, he is from next door) commitment to having a competitive team by 2027 is both realistic and aspirational. It sets a timeline that, while ambitious, also respects the complexity of reshaping a football club from its core.

But achieving that goal hinges on first solidifying the foundational elements, even if they are not glamorous. This means getting the ‘basic, boring stuff’ right: establishing a cohesive youth development pipeline, refining scouting and recruitment to align with a long-term vision, and ensuring a solid organizational structure. These may not excite headlines, but they represent the bedrock on which a truly competitive team can be built. To be fair, INEOS has done such things relatively well, but that’s the subject of another day (sorry for now).

Ultimately, by focusing on these less-visible yet critical elements, the club can foster the stability and culture required to thrive sustainably. Supporters who understand this perspective can better appreciate the slow, deliberate strides that make future success not just a fleeting possibility but a durable reality.

It is easy to see why. The speed of China’s transformation since the 1978 ‘Reform and Opening-Up’ is staggering. Talk to any first-time visitor who’s just stepped off a high-speed train or wandered through one of its megacities. The reaction is usually the same: how do we get this back home?

Copying the surface features of the so-called ‘China model’ is relatively straightforward. Many middle-income governments can fairly quickly produce glossy development plans, create new industrial zones, and reorganize line ministries. Those are the visible parts of the story.

But, here’s the catch – copying the visible scaffolding is not the same thing as copying the institutional engine underneath it. Without the deeper capabilities, state coordination, and political discipline that powered China’s rise, progress tends to be patchy, and often disappointing.

In a short essay at ThinkChina, I explore this issue through two examples: Kazakhstan and Thailand. Both have looked to China for inspiration, but both also reveal the limits of imitation without deeper reforms.

That essay is itself a quick (and admittedly partial) summary of an earlier technical article co-authored with Jewellord Nem Singh and Linda Yin-nor Tjia, published in Competition and Change.  It’s behind a paywall, so if you’d like to read it, just drop me a note and I would be most happy to share.

Miracles here, middle-income traps there. ‘Good governance’ as a slogan, ‘reform’ as a magic word, ‘FDI’ as a cure-all. Southeast Asia as a passive recipient, China as the inevitable hegemon, sovereign wealth funds as technocratic black boxes stewarding national savings. Africa and Central Asia appear occasionally, usually as cautionary tales or footnotes. The Middle East (those rich guys…) is portrayed as hydrocarbons wrapped in geopolitics.

Much of this is incomplete. Some of it is wrong. Almost none of it is neutral.

The Asia They Don’t Teach You is my attempt to tell a more interesting (and almost certainly more honest) story about development, power, and politics across Asia (and by extension, the Global South).

I write from the vantage point of someone who has spent years working on and in the region, talking to policymakers, investors, state planners, and people trying to build firms under messy institutional constraints. While I see myself as an academician first and foremost, I also believe that reality do not live neatly within silos; neither should analysis.

This newsletter is for readers who sense that:

• ‘Success stories’ are more contingent than textbooks (or that uncle of yours who is very active on WhatsApp/Line/WeChat) suggest

• States are often more capable (or predatory?) than clichés imply

• Markets are political institutions, not forces of nature

• The Global South is not a lecture hall receiving wisdom, but a laboratory generating it

What You Can Expect

I will publish essays, deep dives, and shorter provocations on six main themes:

1) State Capital(ism)

How governments use SOEs, SWFs, policy banks, and industrial policy - beyond the lazy ‘state vs market’ caricature.

2) Southeast Asia without the Fairytale

The messy, uneven realities behind the region’s growth.

3) China ‘Going Out’ (Beyond the Hype)

What actually happens on the ground when Chinese capital, firms, and workers meet local politics, nationalism, and bureaucracy. Much of the discussion will focus on cases in Southeast Asia.

4) Inside Global Value Chains

Who moves, who stays, who gets stuck doing low-margin assembly, and who climbs.

5) Development Myths (that Won’t Die)

What development looks like when you stop assuming the Global North as default and treat Asia and the rest of the world as intellectual equals.

6) Other Miracles and Disasters

Comparative lessons from Africa, Middle East, and elsewhere where development is unfolding, often far away from textbook assumptions.

Who This is For

Policy people, scholars, journalists, fund managers, civil servants, students, and anyone who senses that the standard narratives are too tidy for the world we actually live in.

You don’t need to be an economist. In fact, being told you’re ‘not technical enough’ is usually a good sign you’re asking the right questions.

What This is Not

• It is not a cheerleading newsletter for any government or ideology.

• It is not a doom scroll about inevitable collapse.

• It is not consultancy-speak wrapped in PowerPoint.

Why Now?

Because the old scripts are breaking.

Industrial policy is back (or never left?). Security is re-pricing economics. Supply chains are fast evolving. Sovereign funds are becoming strategic actors. The Global South is no longer waiting for a seat at the table - it is building new tables.

The danger is not that we know too little.

The danger is that we are too comfortable with stories that no longer fit.

If any of this resonates, subscribe and share. The best conversations in development are no longer happening only in journals or newspapers or conference rooms - they are happening right under our noses.

Thanks for being here. Let’s start.