January 25, 2008	Friday	Muharram 15, 1429

DAVOS, Jan 24: Sovereign wealth funds are a visible force in Davos this year, reflecting their new-found power, but even at a meeting celebrating globalisation they face suspicion in some quarters.

“There is a lot of worry about the sovereign funds but all these worries are not real cases. They are either assumptions or misinterpretations,” the managing director of Kuwait Investment Authority (KIA), Bader Al Sa'ad, told a debate.

Sovereign wealth funds (SWFs) are estimated to manage about 2.5-3.0 trillion dollars, with five countries managing about 70 per cent of this, said the chief executive of Lehman Brothers, Richard Fuld. He said the amount under management could rise to 15-20 trillion dollars in the next five years.

Funds exist in Russia, China, Kuwait, Singapore, the United Arab Emirates and Norway and several of them recently made a 60-billion-dollar cash injection into Western banks struggling with the fallout of the US subprime crisis.

Larry Summers, a treasury secretary under former US president Bill Clinton, argued that SWFs were a force for good, but were potentially driven with conflicting interests.

“The growth in the size and number of sovereign wealth funds is such that vigilance is required,” Robert Kimmitt, deputy secretary of the US Treasury, told the debate.

He said that the International Monetary Fund and World Bank had been mandated by the Group of Seven industrialised countries to consult with SWFs and draw up a voluntary code of conduct.

Others spoke out in favour of the funds, notably Stephen Schwarzman, the chief executive of US private equity giant Blackstone. But Norwegian Finance Minister Kristin Halvorsen, whose country has the most transparent state fund in the world, appealed for cooperation.—AFP