UNDP Specialist in Sovereign Wealth Funds

Background

Sovereign Wealth Funds (SWF) are public savings funds that commonly invest its resources abroad. Unlike central banks, whose international reserves management pursuits low risk and high liquidity assets, most SWFs present long-term horizons, which allow them to allocate its resources in several asset classes, with higher risk or lesser liquidity.  According to the International Monetary Fund (IMF) there are five types of Sovereign Wealth Funds according to their purposes: (a) alternative international reserves investment, aiming at increasing its profitability; (b) social security purpose, investing government resources to meet future pension liabilities; (c) stabilization, to protect the budget and the economy from volatility in commodity prices; (d) savings, which allows them to transfer the revenues derived from the exploitation of nonrenewable natural resources to future generations; and (e) development, to fund projects or industrial policies.  Regarding their funding, the most common sources are: revenues from non renewable commodities exports (oil, gas, copper etc); fiscal sources (fiscal surpluses, privatization etc), and external sources (balance of payments surplus, international reserves resources, etc).  The growing number of sovereign wealth funds and assets under SWFs management has led to an increased concern about the subject and to the creation of a set of common assessment and reference criteria for SWFs. Truman´s2 Table, the Linaburg-Maduell3 Transparency Index, developed by the Sovereign Wealth Fund Institute, and the Santiago Principles4, defined by the International Working Group of Sovereign Wealth Funds, are the main attempts to define sovereign wealth funds’ best practices. Attempts to establish benchmarks were intensified as a response to the growing importance of SWFs in international financial markets, especially during the recent financial crisis. Sovereign wealth funds, however, are a heterogeneous group in its objectives, funding sources and size, making it difficult to compare and to establish a single governance pattern to be universally adopted.  This contract which will be held under the PREMEF5, includes the creation of technical reports showing the advantages and disadvantages of using SWFs as countercyclical economic policy instruments and is linked to PRODOC’s Result 9 of Product 9.12, signed on October 2, 2012. References: Sovereign Wealth Funds – A Work Agenda. 2008, FMI. A Blueprint for Sovereign Wealth Fund Best Practices. 2008. Peterson Institute for International Economics.  Available at http://www.swfinstitute.org/statistics-research/linaburg-maduell-transparency-index/.  Sovereign Wealth Funds Generally Accepted Principles and Practices. “Santiago Principles”. 2008. International Working Group of Sovereign Wealth Funds.  Signed with United Nations Development Programme (UNDP), under the Technical Cooperation Agreement BRA 06/024 Questions about the project may be answered by sending a request to the email georf.codin.df.stn@fazenda.gov.br  Those interested in taking part in the selection process should send a curriculum vitae and additional information to georf.codin.df.stn@fazenda.gov.br by 01/30/2013.

Duties and Responsibilities

Objective: These Terms of Reference aims at hiring an individual consultant with proven experience in finance, public finance, including the management or analysis of international reserves or SWFs. The final products of this contract are empirical or theoretical studies presented in technical reports that present a survey of the best practices in the use of SWFs as instruments for countercyclical economic policies. A case study will also be requested, the scope of which will be defined by a Work Plan to be submitted by the selected consultant, subject to STN’s approval.  Among the conclusions and comments of both the technical reports and the case study should be an indication of the available means, as well as advantages and disadvantages of using SWFs as countercyclical economic policy instruments. Areas Involved: The National Treasury Secretariat (STN) will be responsible for monitoring all project phases. Work Process: The place where activities related to the subject of these Terms of Reference will be performed shall be set by mutual agreement between STN and the consultant.  Preparatory meetings may be held in person or remotely, at STN discretion.  Throughout the project, the consultant will transfer knowledge to STN´s staff, in a manner that enables them to maintain, develop, manage and improve, from both technical and business standpoint, each product related to these Terms of Reference. It is estimated that it will take at least four presence meetings, each one consisting of up to 40 hours of work. The meetings will discuss the approach planned for the reports and the case study, including hypotheses, methodology, and relevant technical aspects of the work. They will also include workshops and training of STN´s staff on how to use the proposed methodology Expenditures on airfare, daily rates, medical aid, food, local transportation, insurances, among other costs related to the services under these Terms of Reference will run exclusively at the expense of the consultant. The selected consultant must present a Work Plan and a detailed Financial Proposal, to be approved by the STN, containing delivery schedule and estimated additional trips to the specified above, if necessary, at the consultant’s expense.  Upon delivery, each product will be reviewed by the "Product Evaluation Committee", composed of at least 3 STN’s members. The consultant shall certify that the required expertise was transferred to STN’s staff, detailing the activities that were performed for this purpose and assessing the activities and byproducts delegated to STN’s technical and business teams. The technical opinion is a necessary requirement for the acceptance of products. Work Scope: Technical Report that evaluates the means, the merits and disadvantages of using SWFs as countercyclical economic policy instruments. Among other topics, the report should include at least:  Literature review that provides theoretical support for this approach;  Review of the international experience on the issue, including structural balance methodology; Case Study, which scope will be approved by STN; Detailed proposal of endowment and redemption rules, consistent with economic cycles, with appropriate technical justification;  Detailed proposal of efficient ways of using resources to stabilize the effects of economic cycles, including the amounts required; Suggested methodology to identify at what stage of the cycle the country is, in order to subsidize STN monitoring;  Suggested criteria for asset allocation that meet the goal, and Detailed proposal of how to use the resources according to the objective being studied. Workshop enabling the discussion of potential uses of SWFs, according to the technical reports submitted, in order to standardize knowledge amongst staff and STN authorities.  Products: Initial diagnosis - Maximum delivery date (days): 20  - 15% Estimated Value Technical report with literature review and best practices for SWFs that have fiscal stabilization function.- Maximum delivery date (days): 15.   15 % Estimated Value Technical report analyzing the use of SWFs as auxiliary countercyclical policy instruments with fiscal characteristics, including STN’s comments and suggestions. Workshop presenting results and the case study. - Maximum delivery date (days): 180.  70% Estimated Value * Deadlines of each product will be established after Work Plan submission, by the selected consultant, and STN approval.

Competencies

Strong analytical and writing skills and track record in producing relevant reports and other material High level of communication and interpersonal skills and experience in working effectively in a multi cultural environment Sensitivity to diverse opinions and difficulties arising from differing social and cultural perceptions Ability to perform a variety of repetitive and routine tasks and duties Ability to review data, identify and adjust discrepancies Ability to produce accurate and well documented records conforming to the required standard Ability to handle a large volume of work possibly under time constraints

Required Skills and Experience

Experience: Professional experience of at least 5 (five) years in finance, public finance, public sector economics, management or analysis of international reserves or SWFs, or related areas. Experience of working with finance, public finance, public sector economics, management or analysis of international reserves or SWFs, or related areas. Language Requirements: All material (development, activities, presentations, drafts, proposals, emails, briefs, intermediate products, byproducts and final products delivered) must be presented in English or Portuguese. Technical meetings must be held in English or Portuguese. All support material provided by the STN (legislation, regulations, statistics, reports, etc) will be available only in Portuguese. During the technical interview the following requirements will be assessed, which will be scored up to 12 points per interviewer: Experience in working groups conduction; Experience in SWF management;  Experience in SWF monitoring and analysis; Experience in fiscal policies analysis and monitoring; and Communication skills. Criteria for Candidates Evaluation Experience related to SWFs management activities -  1 point per year (Up to 10 points ) Experience in consulting projects related to SWFs - 1 point per project (Up to 5 points ) Papers or working papers (WP) on SWFs -1 point per paper /WP  (Up to 5 points) Work experience in fiscal policies management or analysis. -  1 point per year (Up to 10 points) Experience in consulting projects related to fiscal policy. - 1 point per project (Up to 5 points ) Papers or working papers on fiscal policy - 1 point per paper /WP (Up to 5 points) Professional experience in multilateral organizations - 1 point per year (Up to 10 points) Master Degree - 4 points  (Up to 4 points) Phd Degree -10 points (Up to 10 points) Interview -Up to 12 points per interviewer (total of three)  (Up to 36 points) Total - Up to 100 points7. Criteria for Tasks Development General Criteria:  The hired consultant must sign a confidentiality agreement on all accessed information during the project, as well as the products, and may only disclose results, partially or totally, and any other content, with the express permission of STN. The deadlines set out in these Terms of Reference are not cumulative, must comply with the submitted Work Plan and may be changed if properly justified by the Consultant and approved by STN; All expenses relating to the development, formatting and delivery of products, object of these Terms of Reference, as well as travel, food and transportation shall be borne by the consultant, being included in the final price of services. Products Acceptance Criteria:  Delivery of all components of each product; Clarity and objectivity of received documents’ content;  Transparency during the development of products, byproducts and activities; Fulfillment of all conditions on the execution of the products and byproducts; All documents and files relating to the products must be sent electronically. The file formats must be approved by STN;  Acceptance of each product by the “Products Evaluation Committee”; and The non-acceptance of any product shall be duly justified by the “Products Evaluation Committee”, pointing out all improvements needed for acceptance. RANKING CRITERIA: Applicants will be ranked according to the criteria listed below, upon: (i) curriculum analysis, consisting of curriculum vitae, and all certificates, expertise statements in relevant projects, national and international publications sent by the candidate attesting their technical and professionals skills; and (ii) technical interview that can be held remotely through telephone contact, instruments and software for videoconferencing or teleconferencing.  The Evaluation Committee will have at least three people and will be responsible for the analysis and selection of candidates Accessory criteria, which will be verified by the Evaluation Committee, based on CVs and documents sent, are listed below:  Proven experience in developing and implementing fiscal policy models; Proven experience in analyzing financial and accounting information of the public sector; Proven experience in conducting lectures, seminars and workshops, and Proven experience in asset management. Deadline: The delivery of all products are planned to be carried out in about 8 (eight) months from contract signing. This deadline can be renegotiated with hired consultant at the discretion of STN. Payment: Payment will be subject to product delivery as described in these Terms of Reference and under “Products Evaluation Committee” approval. Product delivery may be anticipated, based on Work Plan schedule, if quality requirements are fulfilled and observing the precedence between products established in the Work Plan.  Clarifications: Questions about the project may be sent to georf.codin.df.stn@fazenda.gov.br  Those interested in taking part in the selection process should send a curriculum vitae and additional information to georf.codin.df.stn@fazenda.gov.br  by 01/30/2013. Only pre-selected candidates will be contacted. Supervision: Supervisor: Líscio de Brasil Camargo Supervisor Role: National Project Director All applications will be treated with the strictest confidence. Due to the volume of applications received, receipt of applications cannot be acknowledged individually. Only short-listed applicants will be contacted.

http://jobs.undp.org/cj_view_job.cfm?cur_job_id=34541