ABSTRACT

The National Wealth Fund (NWF), which is often referred to as the Welfare Fund in the media, was established in 2008 as a result of the split in the four-year old Stabilization Fund. The NWF was created during the period when Russia was hit by the global financial crisis. The economic hardship undermined the mandated objective of the fund to the extent that, before the NWF could formalize its investment criteria and asset management, it had to provide some of its assets as domestic loans to banks and businesses or bail out various institutions. In order to better understand the purpose of the NWF we need to study the Stabilization Fund and look at the economic and political environment prior to its establishment as well as the relationship between the fund and the Russian federal budget. The NWF is third in line when it comes to receiving oil and gas revenues.