Role of Sovereign Wealth Funds rather increases during crisis: experts

Role of Sovereign Wealth Funds rather increases during crisis: experts

Azerbaijan, Baku, October 7 / trend Capital U. Ismayilova /

Role of Sovereign Wealth Fund rather increased during financial crisis, head of Public Finance Monitoring Center (PFMC) NGO, Ingilab Akhmadov, said during the workshop 'Sovereign Wealth Fund: Global prospects and local challenges' on October 7.  

Serious discussions on importance of sovereign wealth funds and their role in solving problems with the global financial crisis's impact were held at today's workshop", Akhmadov said.

He said that before the global crisis, owners of such funds made a decision on cooperation and joint work and adopted the so-called "Santiago Principles." Crisis rather corrected their work. Before the crisis funds preferred to govern assets abroad and many countries have openly satted about it. But there is an urgent need during crisis to use funds within the country.

"Negative impact of the world financial crisis in countries with similar funds (there are 56 funds) is not so obvious," Akhmadov said.  

Speaking about position of separate funds, Akhamadov said that the world financial crisis damaged several of them. So, Norway's State Pension Fund lost $90 billion or 22 percent of total volume of assets.

But four Sovereign Wealth Funds of Gulf's countries (Saudi Arabia, Kuwait, Qatar and Abu Dhabi) lost $350 billion.  

Total assets of all Sovereign Wealth Funds are estimated to the amount of $3 trillion in the world, chief investment officer of the Azerbaijani State Oil Fund Israfil Mammadov said during the workshop.

Speaking about importance of these funds, Mammadov said that funds play important role in forming macroeconomic stability during crisis.

Chairman of SWF forum David Murray said that 75 percent of Sovereign Wealth Funds' assets are connected with use of oil and gas resources, 20 percent with other minerals and only 5 percent - non-mineral resources. Murray also participated in the workshop.

He said that Sovereign Wealth Funds must hope for long-term investments and ensure liquidity of their resources during crisis.

IMF reprehensive Udaibir Das stressed that Sovereign Wealth Funds are important organizations to solve macroeconomic indices on the domestic market, as well as they can support local banks to ensure fiscal policy of the state.

"I think that all countries with similar funds can establish united fund, organization of sovereign funds in future. Their role in financial organizations is very important," Das said.

Deputy Director of Revenue Watch Institute, New York, Antoine Heuty, stressed importance of paying special attention to changes of supply policy of funds during crisis. He said that Sovereign Wealth Funds are in the center of attention of its institute.

It should be noted that the workshop was held under Revenue Watch Institute, New York.

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