Q&A with Christian Braun, Creator of SWF Radar

By Ashby Monk

The Oxford SWF Project is a source of open discussion and engagement on the topic of SWFs. As such, we welcome and indeed seek out all views and opinions on the subject. Today, we offer the fourteenth instalment of our segment: “Q&A with a SWF expert, stakeholder or policymaker”. We are pleased to welcome Christian Braun, creator of SWF Radar. While Mr. Braun’s views are his own, his perspective helps to further debate and facilitate understanding.

Ashby Monk: It is a pleasure to have you with us, Christian. I think anybody reading this today will agree that SWF Radar has been a phenomenal resource. I’m curious, what sparked your interest in SWFs and led to the idea for the site?

Christian Braun: In 2001 I helped launch a magazine on corporate responsibility and related topics. This introduced me to the issue of the use of non-financial investment criteria, specifically social and environmental criteria, by public pension funds, something in which I have had a keen interest ever since. When the debate about SWF investments kicked off in 2007, I saw parallels with earlier arguments about public pension fund investments. So I decided to track news stories about SWFs to observe how the debate and the issues evolved. SWF Radar was the upshot of this.

Ashby Monk: To the extent that you can talk about your readership, who is interested in SWFs?

Christian Braun: Often the networks that sent the most visitors on any given day were those of the big financial firms that provide investment services for SWFs. The readers who visited the site most regularly came to a great degree from these firms. The site had regular visitors from all sorts of different firms and institutions, though, from SWFs and central banks through to small organizations without an identifiable network location.

Ashby Monk: I can’t imagine anyone has followed SWF news more than you. How have perceptions changed over the past year?

Christian Braun: Looking just at the United States, SWFs were treated with suspicion by the administration and by official agencies such as the S.E.C. until a few months into 2008. By around June 2008, though, the U.S. Treasury in particular had started switching the focus away from any potential risks associated with SWF investments toward the need to avoid protectionism. This probably helped tone down the rhetoric about SWFs in the press. But it will take another wave of SWFs investments to test exactly how perceptions and attitudes have changed since last fall and winter. The fact that the launch of the IMF’s GAPP guidelines was pretty much ignored by the press does suggest, though, that the perception of SWFs as something threatening may have eased. It will be interesting to see what happens under the Obama administration, especially given that Lawrence Summers, who is one of Obama’s top economic advisers, helped kick off the present SWF debate with his piece in the Financial Times in July 2007 on how SWFs, as he saw it, “shake of the logic of capitalism.”

Ashby Monk: Do any news stories stand out in your mind as being critical to the shaping of the SWF debate over the past few years?

Christian Braun: The Lawrence Summers piece I just mentioned, though not a news story, was important. This spelled out several of the central issues and even pulled the likes of Gazprom, a state-owned enterprise, into the debate about the investment of sovereign wealth. Another thing that was itself newsworthy was 60 Minutes’ interview with Gao Xiqing, general manager of the China Investment Corporation, broadcast in April this year. The CIC had been vilified by certain parts of the U.S. media, notably by Lou Dobbs on CNN. So seeing its soft-spoken, self-effacing investment chief give a candid interview in fluent English to a major U.S. current affairs program I think did a lot to blunt the criticism and reduce the scaremongering. One news piece that had little resonance but that I think was extremely important was the Financial Times’ report in September this year that claimed that China’s State Administration of Foreign Exchange had used its funds to push Costa Rica to sever ties with Taiwan and establish relations with China. I saw you brought this up in the Q&A you published earlier in November with the OECD observer to the IMF’s International Working Group.

Ashby Monk: Do you think the media has done a good job of covering SWFs? In what way has coverage been lacking?

Christian Braun: As I mentioned earlier, there was almost no coverage of the launch of the IMF’s GAPP guidelines. I’m not sure how much coverage these guidelines deserve, and I wrote at length on a couple of occasions on SWF Radar about why I think the GAPP will not work. But I still found it strange that there was such a lack of coverage. That is the one thing I’d point to and say that coverage was not what it maybe should have been.

Ashby Monk: SWF Radar is great in part because it amalgamates the news without extensive commentary. Can I coax a bit more commentary out of you now? Are you at all concerned by the rapid growth in SWFs? Why or why not?

Christian Braun: I am not at all concerned. I would, though, be very concerned about a move toward protectionism. This is not to say that I think SWFs are necessarily a good thing, especially since their inability to engage in governance-related activism for fear of triggering political alarm bells may be a drag on the corporate governance movement, of which I am a keen supporter.

Ashby Monk: What’s next for you?

Christian Braun: SWF Radar eventually started taking up much more of my time than I anticipated, so I’m now pleased to be able to focus more closely again on my freelance work in corporate publishing and corporate communications. I’ll be devoting some of the time I’ve now freed up to the book I’m writing on private property and money. It’s something I’ve been working on for a while now, and I expect to have the first draft finished by April 2009.

Ashby Monk: Thanks, Christian, and good luck in your future endeavors. We’re all grateful for your work on SWFs to date. Keep in touch…

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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