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Sovereign Wealth Funds

Sovereign Wealth Funds. Building Trust for International Investment Rainer Geiger Director, OECD-MENA Investment Programme Istanbul Forum, 23 April 2008. SWFs: What They Represent – How Sovereign They Are. No new phenomenon but new players Expanding financial power

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Sovereign Wealth Funds

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  1. Sovereign Wealth Funds Building Trust for International Investment Rainer Geiger Director, OECD-MENA Investment Programme Istanbul Forum, 23 April 2008

  2. SWFs: What They Represent –How Sovereign They Are • No new phenomenon but new players • Expanding financial power • New investment activities • Long-term investment perspectives • Subject to the laws of the countries in which they operate

  3. Benefits • Recycling liquidities • Recapitalising financial institutions • Seeking productive investment opportunities • Becoming an actor in development co-operation

  4. Concerns • Role of foreign governments • Protection of strategic sectors • Lack of information • Poor governance

  5. Policy Tools Applying toSWFs • Competition Policy (Dominance and Merger Controls) • Financial Market Regulations • Corporate Governance • FDI Policies

  6. Maintaining an Open Investment Climate • Non-discrimination • Progressive liberalisation • Narrow focus and proportionality of remaining restrictions • Procedural fairness and predictability

  7. The National Security Dimension • Screening and approval processes • Self-judging policies • Need for transparency of criteria and procedures • Consultations and peer reviews

  8. Corporate Governance Helps • Information on structures & policies of SWFs • Separation of government ownership policies & SWF investment activities • Level playing field with private investors • Disclosure of SWF investment strategies • Adherence to corporate government principles & strategies for responsible investment (OECD, IFC, UN)

  9. SWFs and Turkey • Create mutual benefits through identification of investment opportunities • Develop the business environment in Turkey: Modernise regulations, move forward with privatisation and financial sector reform • Establish a dialogue with SWF at policy level & through the Investment Promotion Agency

  10. OECD AND MENA • Engage in dialogue with SWFs and home governments on policy tools and principles (Investment; Competition; and Financial Market Committees, Steering Group on Corporate Governance • Use MENA-OECD Investment Programme for corporate governance work on State Owned Enterprises, including Arab SWFs

  11. Conclusions • No discriminatory policies for SWFs but policies to maintain level playing field • Encourage home countries & SWFs to upgrade their own environment on governance & responsible business conduct • Create mechanisms for dialogue among home and host countries & international organisations in areas of investment, corporate governance & development strategies

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