Working Group Announces Creation of International Forum of Sovereign Wealth Funds
Press Release No. 09/01
April 6, 2009
The International Working Group of Sovereign Wealth Funds (IWG) announced today in Kuwait City the establishment of the International Forum of Sovereign Wealth Funds (Forum). The Kuwait Declaration, issued at the end of a two-day meeting hosted by the Kuwait Investment Authority and the State of Kuwait, states that the Forum, a voluntary group of SWFs, will meet at least once a year to exchange views on issues of common interest and facilitate an understanding of the Generally Accepted Principles and Practices—“Santiago Principles”—and SWFs’ activities.
Mr. David Murray, Chairman of Australia’s Future Fund Board of Guardians, was elected by the IWG members to chair the Forum. Mr. Jin Liqun, Chairman of the Board of Supervisors, China Investment Corporation, and Mr. Bader Mohammad Al-Sa’ad, Managing Director, Kuwait Investment Authority, were elected to be deputy chairs of the Forum.
Mr. Murray thanked the members of the Forum for honoring him with this position and Mr. Hamad Al Suwaidi, Undersecretary of the Abu Dhabi Department of Finance and a Director of the Abu Dhabi Investment Authority, and Mr. Jaime Caruana, former Financial Counselor, International Monetary Fund, for their invaluable contribution to the IWG. “They were instrumental in reaching agreement on the Santiago Principles and, ultimately, in the establishment of this Forum,” he said.
"The changes in the global financial landscape have been extraordinary in scope and reach. At this critical time, the importance of establishing a standing group of SWFs to have an ongoing dialogue on matters of shared interest between themselves and other interested parties such as investment recipient countries has taken on increased relevance", he added.
The Forum welcomed the G-20 Communiqué and the desirability of a new global consensus on the key values and principles that will promote sustainable economic activity. The Forum noted, in particular, the pledge to do whatever is necessary to promote global trade and investment and reject protectionism, to underpin prosperity.
The Forum will operate in an inclusive manner and facilitate communication among SWFs, as well as with relevant recipient country officials, the European Commission, the OECD, representatives of other multilateral organizations, and the private sector. Through its work, the Forum will contribute to the development and maintenance of an open and stable investment environment, thereby supporting the guiding objectives underlying the Santiago Principles.
The Forum has also established three sub-committees to work on (i) experiences in the application of Santiago Principles to date, (ii) investment and risk management practices, (iii) international investment environment and recipient country relationships.
The Forum has requested IMF staff, which helped facilitate the work of the IWG on the Santiago Principles, to initially undertake the role of Secretariat of the Forum.
The Forum will conduct its inaugural meeting in Baku, Azerbaijan in October 2009, organized by the State Oil Fund of the Republic of Azerbaijan and the Government of Azerbaijan.
Kuwait’s Deputy Prime Minister and Minister of Foreign Affairs Sheikh Dr. Mohammed Sabah Al-Salem Al-Sabah, in his address to the IWG members, shared certain key considerations that impact on the activities of sovereign investors arising from the ongoing financial crisis and the decisions taken by the G-20 at the recently concluded London Summit. He said it was critical to recognize that conditions and the environment of the global markets and the international financial system were set to change. It was thus necessary to build trust, and for the sovereign investors to recognize the rebalancing of the global economy, and global interconnectedness. The Deputy Prime Minister was optimistic that the decisions taken in Kuwait by the members of the new Forum will contribute to a recovery of global capital flows and the investment environment. He also outlined several key steps taken by the government of Kuwait to stabilize the domestic markets and restore trust and confidence in the financial system.
In his address, H.E. Mustafa J. Al-Shimali, Minister of Finance and Chairman of the KIA Board of Directors thanked the IWG for all its efforts. The process used by the Working Group to arrive at the Santiago Principles was based on an innovative, postmodern approach to global governance. It was remarkable that State entities committed themselves to voluntary principles based on “peer review.” The new International Forum of Sovereign Wealth Funds agreed in Kuwait, was a concept whose time has arrived. The Finance Minister assured the Forum that Kuwait remains committed to implementing best practice as a responsible member of the international financial community and in providing the Forum all support.
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The Santiago Principles, developed by the IWG, aim to promote a clearer understanding of the institutional framework, governance, and investment operations of SWFs that would support the maintenance of an open and stable investment climate. They are a common set of voluntary principles and practices to help maintain the free flow of cross-border investment.
The IWG member countries are: Australia, Azerbaijan, Bahrain, Botswana, Canada, Chile, China, Equatorial Guinea, Iran, Ireland, South Korea, Kuwait, Libya, Mexico, New Zealand, Norway, Qatar, Russia, Singapore, Timor-Leste, Trinidad & Tobago, the United Arab Emirates, and the United States.