When is debt the same as wealth? When both belong to a sovereign, either as an individual or as an organisation, such as a sovereign wealth fund, sponsored by a government.
It is an apparent paradox that indebtedness can be the same thing as richness, but it does illustrate one increasingly important aspect of the post-crisis global financial system: the role that governments, as opposed to private corporations, play in the ebb and flow of capital funds across the world.
Sovereign wealth funds (SWFs) are more or less as their name describes them: stashes of capital built up by governments in a number of ways - sometimes through the fortuitous existence of natural resources, as is the case with the SWFs of the Middle East with their massive energy revenues; and sometimes by efficient exporting industries and prudent savings policies, as with China and Singapore.
Whatever their origin, SWFs are all the equivalent of hard cash in the bank.
Perversely, sovereign debt used to be virtually the same thing. Before the financial crisis, national governments, especially those from the wealthy West with "AAA" ratings, had no trouble borrowing capital in the international markets. Their good name was their bond, literally.
Countries from the Group of 20 (G20) leading industrialised nations could raise money by issuing debt virtually whenever they liked. Outside that group, it got harder the lower down the ratings scale you went, but an apparently well-backed government, such as Dubai's, would have little problem obtaining long-term loans. Government debt was, to all intents and purposes, the same as government wealth, apart from the vital distinction that it had to be repaid.
How times have changed. The debate over the value of sovereign debt is growing, fuelled by the huge money-printing programme the US calls quantitative easing, and by the difficulties of national governments such as those of Greece, Ireland and Portugal in previously blue-chip Europe.
Doubts about the value of sovereign debt may have originated in the West but, like the financial crisis itself, are rapidly spreading around the world. This week, a report by the US group King Worldwide (which has a presence in the UAE in the form of M Communications) found that investors in sub-G20 sovereign debt wanted more and more accurate information before they extended credit.
A survey of 25 leading investors with more than US$400 billion (Dh1.46 trillion) to spend concluded that they wanted information and updates from issuers at least once a quarter, whereas many issuers would provide such information only once a year.
The matter is not just a simple one of debt issuers keeping investors in the dark. Most issuers will release fairly detailed information in the prospectus that accompanies the initial issue, but debt is a tradable commodity, and most business is done in the secondary markets. Investors who missed out on the initial roadshowand bought the debt from a first-round investor (an increasingly common phenomenon in the Gulf) feel particularly aggrieved.
Some issuers are better than others. For example, Dubai won considerable praise last year when it issued a supplement to a $4bn medium-term note programme that gave detailed and up-to-date information about the emirate's financial and economic status. It was especially important, after the crisis sparked by Dubai World's debt restructuring, to be seen to be treating investors fairly.
But the call from investors everywhere is the same: more information, more transparency, more light.
Times are changing on the other side of the "sovereign paradox" as well.
Before the financial storm of 2008, SWFs, especially from the Middle East, were in defensive mode. They were looking for suitable investments, mainly in the West, but were greeted with a rather sniffy response. What was the origin of the funds? Did they come with political strings attached? Were they long-term?
It was almost as though their money wasn't good enough, and the SWFs responded by drawing up a voluntary code of conduct called the Santiago Principles, in which the Abu Dhabi Investment Authority had significant input.
Santiago was a worthwhile exercise but was virtually redundant the moment it was published in October 2008. By then, western financial institutions' balance sheets had been devastated by the Lehman Brothers collapse, and most were happy to get life-saving capital injections from anywhere, regardless of the origins or the strings.
These investments by SWFs helped bail out the West but were a mixed bag for the investors. Some, such as Abu Dhabi's stake in Barclays Bank, were almost instantly profitable; others were not quite as successful.
The SWFs are learning lessons from that, too. A second piece of research this week, from State Street Global Advisors, found that SWFs were rethinking their basic investment strategies and risk management after the financial hurricane.
They are less likely to consider "active" investments (such as the big stakes in western banks) and are more likely to look to emerging markets (for which read Asia) rather than to the US and Europe.
The sovereign wealth funds are reacting to the post-crisis environment just as surely as are their partners in the paradox, the debtors, and this will affect global capital flows for decades to come.