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07/10/2008 - Sovereign Wealth Funds conference
On 7th October, Blueprint Partners co-hosted a full-day conference on sovereign wealth funds (SWFs), entitled ‘Golden geese or new locusts?’, in collaboration with the British Chamber of Commerce in Belgium.
The morning panel looked at the nature of SWFs and how they are responding to international initiatives. Keynote speaker David O’Sullivan, Director-General of DG Trade, refuted fears about SWFs and said that there is no evidence of politically motivated investment. However, the Commission expects them to meet certain standards regarding governance, accountability and transparency, as outlined in its Communication last February, and in this regard will follow their implementation of the IMF’s recently agreed Santiago principles. He concluded that Europe should fight against protectionism rather than against SWFs and work with them to keep the world economy open.
On the side of SWFs, Jon Aarons of Financial Dynamics, speaking from the perspective of Mumtalakat (Bahrain’s SWF), and Alexander Krestyianov, the Deputy Head of Russia’s Mission to the EC, stressed the conservative, non-political nature of SWF investments. Mr. Aarons said that transparency could not be pushed too far, as Western governments are not always transparent with their own finances.
The afternoon panel looked at what the European response to SWFs should be. Keynote speaker Graham Watson MEP, Chairman of the Parliament’s ALDE group, noted that the current financial market crisis would have been much worse without SWF investments. However, as SWFs are mostly based in non-democratic countries, there are legitimate concerns about accountability and especially transparency – it is essential to address the latter to make fears about possible political motives subside.
Other speakers in both panels largely agreed that SWFs should be seen as more of an opportunity than a threat for Europe, particularly given the shortage of capital in the new financial climate. They saw no sign of politically motivated behaviour, and welcomed the Commission’s approach. However, the need to address transparency was stressed by several speakers.
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