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Western countries must provide wealth funds clarity too - Lubna

Rich countries calling for more openness from foreign state-owned investment funds need to provide more clarity themselves, UAE Minister of Foreign Trade Shaikha Lubna Al Qasimi said on Saturday.

  • Reuters
  • Published: 00:01 March 16, 2008
  • Gulf News

Brussels: Rich countries calling for more openness from foreign state-owned investment funds need to provide more clarity themselves, UAE Minister of Foreign Trade Shaikha Lubna Al Qasimi said on Saturday.

Shaikha Lubna said sovereign wealth funds - which have amassed trillions of dollars in funds for investment - were struggling to understand the rules of the game in developed economies.

"When we talk about clarity and transparency, we are talking about a joint responsibility. It's not a one-sided story," she told the Brussels Forum conference on transatlantic relations in Brussels.

Shaikha Lubna said demands on state funds kept changing and it was unclear what recipient countries considered as their strategic sectors, national interests or security concerns, all of which could be used to justify barring investments.

Bank bailouts

Sovereign funds have helped rescue struggling Western banks in recent months.

Most European Union and US officials stress they want to keep markets open to the funds, especially in the midst of a credit squeeze where investment capital is scarce.

But some US and European politicians fear foreign states might use the funds for political or strategic purposes, rather than for purely commercial reasons. A new fund in China has only heightened those concerns.

Critics also point to the secrecy of some funds about their portfolios and their internal investment rules.

The International Monetary Fund and other institutions are drawing up best-practice guidelines for the wealth funds and a first draft is due to be published in October.

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