There is not the slightest doubt about the professionalism of the agreement reached by an international working group consisting of 26 countries that are members of the International Monetary Fund on the “Santiago Principles.” These principles are built around objectives that govern the investments of sovereign wealth funds in member states, with the aim of creating sustainable economic environments in the recipient exporting countries, in addition to strengthening competition among funds by separating their investments from the political orientations of governments. The agreement, concluded in 2008, in which Kuwait obtained membership and Saudi Arabia held observer status, gave us hope that “transparency” in managing sovereign wealth fund investments in the Gulf states was inevitably on its way.

The concept of “public disclosure” dominates many of those principles, which address spending approaches and withdrawals of balances, as well as the governance framework, its objectives, how the sovereign fund is managed, and whether it operates on the basis of operational independence from its owning authority. They also concern relevant financial information that clarifies economic and financial direction, in addition to the general methodology adopted for the risk-management framework. Among the other most important principles is the prohibition on such funds seeking confidential information or acquiring influence through their governments in the broadest sense, or exploiting such information in competition with private entities.

The question today, nearly nine years after that agreement, is this: to what extent have sovereign wealth funds in the Gulf complied with those principles? As for Kuwait, the agreed concept of “public disclosure” has not been implemented because it conflicts with “Law No. 47 of 1982 concerning the establishment of the Kuwait Investment Authority, which is responsible for managing those funds,” and with its provisions that marginalize the concept of public disclosure and prohibit the release of any data or information about the condition of invested funds except with written authorization. This conflict obliges the Authority to address it, either by withdrawing from the agreement in an “unprofessional” manner, or by submitting a request to amend the law’s provisions to the government in a “more professional” manner so that the necessary action may be taken.

There is no doubt that Saudi Arabia, too, was late in taking the “Santiago Principles” into account during past years. Yet it deserves acknowledgment that the mechanisms of its vision — incorporating “Aramco” into its sovereign fund and listing part of it — despite being at the beginning of their journey, appear somewhat inclined toward adopting those principles in a more realistic manner than the Kuwait Investment Authority has done.

What is the most important question when dealing with institutional reform?

Institutional reform becomes difficult when interests, administrative habits, and weak accountability accumulate; it needs lasting rules, not scattered decisions. Through the angle of trust, the result appears not only in declared language, but in the policy’s ability to change incentives and outcomes.

What is the most important question when dealing with governance and reform?

Governance makes reform executable because it defines responsibilities, closes loopholes, and links decisions to accountability. Through the angle of trust, the result appears not only in declared language, but in the policy’s ability to change incentives and outcomes.

How does sovereign wealth fund transparency affect Kuwait?

Its effect appears in how costs, incentives, and resources are managed, and in Kuwait's ability to turn decisions into sustainable value. The direct context is gulf sovereign funds’ adherence to the Santiago Principles, focusing on public disclosure in Kuwait and emerging Saudi reforms.

What is the most important question when dealing with legal loopholes?

Legal loopholes give corruption a safe path within the text of rules, so reform needs precise drafting and institutional oversight. Through the angle of trust, the result appears not only in declared language, but in the policy’s ability to change incentives and outcomes.