An Unsurprising ‘Sydney Statement’

Ashby Monk

The International Forum of Sovereign Wealth Funds just released its “Sidney Statement” describing the conclusions and takeaways from the 2nd Annual Meeting of the IFSWF that finished up in Sydney on Saturday.

I have to say, my predictions last week about what would feature in the Statement look to be almost spot on. Here is the Statement abstract:

“The Forum members exchanged views on the Santiago Principles (Principles), and the emerging investment outlook given the current market conditions and the ongoing regulatory policy reform agenda. Of particular importance was the opportunity to continue dialogue with recipient countries with a view to maintaining free flow of long-term investment capital. Hosted by Australia’s Future Fund, senior officials from 22 SWFs attended the meeting. Senior level representatives from 6 recipient countries, the Asian Development Bank, European Commission, the International Monetary Fund, the OECD, and the World Bank also participated.”

There’s nothing too noteworthy here, in my opinion. Still, there was a seemingly innocuous tidbit near the bottom of the Statement that’s worth flagging:

“The Forum members will undertake a survey on the experiences with application of the Principles and publish relevant parts of it.”

I interpret this to mean that a serious discussion took place about the need to introduce some formal compliance metrics for the Santiago Principles. However, the prospect of formal compliance procedures inspired quite a bit of anxiety about what this could mean for SWFs deemed to be “non-compliant”. So a compromise was found: a ‘survey of experiences with application of the Principles’. To me, this is a euphemistic way of saying that the Forum will assess how far SWFs have gotten with implementation, which is good news.

While we’ll have to wait for the Beijing IFSWF meeting in April 2011 before we see the results of this survey (…if we ever see them…), I think this is a step in the right direction. In my view, compliance and implementation are crucial for the long-term success of the Principles…and the survey is the first step.

2 Responses to “An Unsurprising ‘Sydney Statement’”

  1. 1 Larry Catá Backer May 10, 2010 at 8:37 pm

    Thanks Ashby. No surprises here. I tend toward less optimism–the statement serves as a tease–just enough of a promise of future action to keep the host state representatives from getting nervous.

  2. 2 Ashby Monk May 14, 2010 at 10:37 am

    I think you’re right…in certain cases. My sense is that within the IFSWF there are those that would love to see formal compliance…and those that would do just about anything to stop it from happening. It differs from fund to fund. So I think the funds that want formal compliance at least got something to show for it…

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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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