It seems that people always have to be afraid of something that is out there. When we are kids we are scared by the ghost stories, when we grow up we blame something more specific, that is out there, but what we wrongly take for something it is not.
Take UFOs. Whatever the conspiracy theorists might have to say about them, they turn out to be planes or scientifically explainable atmospheric phenomena. But they are still spooky and scare some people. Now take SWFs. Also something that is (in common understanding) alien and mistaken for something it is not. And apparently, some people also find them spooky.
This week IMF gathered the representatives of the world largest SWFs to agree on the draft of Generally Accepted Principles and Practices for Sovereign Wealth Funds. Although not to be made public until October 11, when they will be presented to the IMF's governing council, they are said to contain 24 principles on [quote] legal, institutional and macroeconomic issues, as well as governance, accountability, investment strategies and risk management [end of quote, source: WSJ]. In essence though, this code should address the irrational fear of the developed world over hidden political agenda behind the SWF investments. It seems that the same xenophobic frenzy that raged at the time of Dubai Ports bid for some of the U.S. ports, is blinding politicians around the world again.
Let's look at the facts.
Fact #1: No SWF investment with any hint for a hidden political agenda has been documented so far.
Fact #2: There is a clear political agenda behind many of the deals that western companies make, often with explicit backing of the respective governments. For instance, take the U.S. political lobby in energy sector, or merger of France's Suez and Gaz de France.
Fact #3: There is a lot of talk of imposing some kind of control on SWF investments. Take Germany, where politicians are pushing for regulations, or the U.S., where people are blaming SWFs for the extreme volatility of commodity prices.
So, to sum it up, it is okay for the western companies to have political agenda, but even a faintest hint of something like that in the SWFs (some of which, as it happens, come from developed countries as well) actions is something to go crazy about.
In my opinion, people should stop trying to see a UFO in every bright spot at the horizon. This is very much a waste of their time. The same goes with SWFs. If we stop seeing politics behind what really is a much-needed source of capital in the time of credit crunch, we might as well find a better use to our time. Although, even if we do, there are always ghost we can get scared of...
Take UFOs. Whatever the conspiracy theorists might have to say about them, they turn out to be planes or scientifically explainable atmospheric phenomena. But they are still spooky and scare some people. Now take SWFs. Also something that is (in common understanding) alien and mistaken for something it is not. And apparently, some people also find them spooky.
This week IMF gathered the representatives of the world largest SWFs to agree on the draft of Generally Accepted Principles and Practices for Sovereign Wealth Funds. Although not to be made public until October 11, when they will be presented to the IMF's governing council, they are said to contain 24 principles on [quote] legal, institutional and macroeconomic issues, as well as governance, accountability, investment strategies and risk management [end of quote, source: WSJ]. In essence though, this code should address the irrational fear of the developed world over hidden political agenda behind the SWF investments. It seems that the same xenophobic frenzy that raged at the time of Dubai Ports bid for some of the U.S. ports, is blinding politicians around the world again.
Let's look at the facts.
Fact #1: No SWF investment with any hint for a hidden political agenda has been documented so far.
Fact #2: There is a clear political agenda behind many of the deals that western companies make, often with explicit backing of the respective governments. For instance, take the U.S. political lobby in energy sector, or merger of France's Suez and Gaz de France.
Fact #3: There is a lot of talk of imposing some kind of control on SWF investments. Take Germany, where politicians are pushing for regulations, or the U.S., where people are blaming SWFs for the extreme volatility of commodity prices.
So, to sum it up, it is okay for the western companies to have political agenda, but even a faintest hint of something like that in the SWFs (some of which, as it happens, come from developed countries as well) actions is something to go crazy about.
In my opinion, people should stop trying to see a UFO in every bright spot at the horizon. This is very much a waste of their time. The same goes with SWFs. If we stop seeing politics behind what really is a much-needed source of capital in the time of credit crunch, we might as well find a better use to our time. Although, even if we do, there are always ghost we can get scared of...
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