Beyond Santiago: Status and Prospects

Beyond Santiago: Status and Prospects
Op-Ed Central Banking
Implementation of the Santiago Principles is highly uneven and there is still far to go if sovereign wealth funds are to be responsible members of the global economy.
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The rise of sovereign wealth funds as an important investor class in international finance has been a source of concern for a number of industrialised economies who feared that these funds’ investments could compromise their economic competitiveness and national security. Reacting to steps – some real, some threatened – in recipient countries to enact regulation against sovereign investment, sovereign wealth funds responded by developing their own set of “industry standards.” In October 2008, the International Working Group of Sovereign Wealth Funds published the Generally Accepted Principles and Practices (GAPP), more commonly known as the Santiago Principles.

The purpose of the Santiago Principles is to identify a framework of generally accepted principles and practices that reflect appropriate governance and accountability arrangements, as well as prudent investment practices by sovereign wealth funds. Three aspects relating to the Santiago Principles warrant closer examination and will be discussed in this article: first, why did sovereign wealth funds find it necessary to develop and associate themselves with the Santiago Principles? Second, what is the status of the principles as a new approach to global financial governance? And third, how robust are the Santiago Principles and can they contribute to a stable global financial system and a free flow of capital and investments?

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In Fact



of Brazilian protesters

learned about a massive rally via Facebook or Twitter.


million cases pending

in India’s judicial system.

1 in 3


now needs urgent assistance.


political parties

contested India’s last national elections.


of Egypt's labor force

works in the private sector.


years ago

Carnegie began an internship program. Notable alumni include Samantha Power.


of oil consumed in the United States

is for the transportation sector.


of Chechnya’s pre-1994 population

has fled to different parts of the world.


of oil consumed in China

was from foreign sources in 2012.


of Syria’s population

is expected to be displaced by the end of 2013.


million people killed

in Cold War conflicts.


of the U.S. economy

is consumed by healthcare.


billion in goods and services

traded between the United States and China in 2012.


billion in foreign investment and oil revenue

have been lost by Iran because of its nuclear program.


increase in China’s GDP per capita

between 1972 and today.


billion have been spent

to complete the Bushehr nuclear reactor in Iran.


of Iran’s electricity needs

is all the Bushehr nuclear reactor provides.


new airports

are set to be built in China by 2015.



were imprisoned in Turkey as of August 2012 according to the OSCE.


of the world's population

will reside in cities by 2050.


million Russian citizens

are considered “ethnic Muslims.”

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