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Paris: The West is overly suspicious of state-backed investment funds from China, Russia and the Middle East, and a voluntary code of conduct is enough to promote good practice, EU Trade Commissioner Peter Mandelson said on Friday.
He was speaking at a forum at the Organisation for Economic Co-operation and Development, which had been asked by the G7 industrialised powers to suggest what policy should be adopted towards these so-called sovereign wealth funds.
The primary challenge, Mandelson said, was essentially a political one.
"How do we integrate these huge new players into the global financial system in a way that reassures the recipients of investment without casting the funds as potential villains?" he said, according to a text of his speech released to reporters.
Logic
"There is nothing inherently suspicious about sovereign wealth, or the desire to invest it productively," he said, noting that this was in fact the logic of such funds both in theory and in practice.
"So why are we having this debate at all? Looking coolly at the question the answer is - and I will put this as diplomatically as possible - that the biggest funds are in economies which have raised some sensitivities in our own politics," he said.
"No one is worried about Norway's plans for global domination. Chinese investment vehicles and the Russian stabilisation fund, on the other hand, are new investors, with huge reserves, backed by governments with mixed democratic credentials, substantial foreign policy projection and no track record as investors," he said.
He said a single international code of conduct was the best route to take, enshrining concepts such as periodic reporting and publication of business plans, without casting unfounded suspicion or excessive burdens on such funds.
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