By Karen Bong
KUCHING, Nov 22: A corporate body called the Sarawak Sovereign Wealth Future Fund Board will be set up as the custodian to manage the Sarawak Sovereign Wealth Future Fund that seeks to maximise the returns from the State’s surplus capital reserves through investment.
In addition, Premier of Sarawak Datuk Patinggi Tan Sri Abang Johari Tun Openg pointed out that Sarawak also intends to apply to be a member of the International Forum of Sovereign Wealth Funds (the Forum) to ensure that it applies to the highest standard of governance and transparency in managing its own sovereign wealth fund when established.
“Several benchmarking visits to study the best practices in sovereign wealth fund management, investment strategies, governance, as well as the appropriate legal policy framework were carried out.
“These countries visited were Norway, Singapore and England which have been lauded for having established sovereign wealth funds that have proven very successful and have gained international recognition for their transparent and good governance,” he said when tabling the Sarawak Sovereign Wealth Future Fund Board Bill 2022 at the State Legislative Assembly (DUN) Sitting today.
These countries, he continued, were among the members of this Forum which are required to adhere to international best practices including the generally accepted principles and practices for sovereign wealth funds, better known as the ‘Santiago Principles’.
Abang Johari explained that the Santiago Principles advocate to help maintain a stable global financial system and free flow of capital and investment.
“Apart from that, to comply with all applicable regulatory and disclosure requirements in the countries in which they invest; to invest based on economic and financial risk and return-related considerations; and to have in place a transparent and sound governance structure that provides for effective operational controls, risk management and accountability,” he said.
Abang Johari emphasised that the establishment of sovereign wealth funds worldwide has gained popularity in the last decade, and the value of assets under management under sovereign wealth funds has almost doubled from USD4.8 trillion in 2010 to USD9.1 trillion in 2020.
“The tabling of this Bill is the government’s fulfillment of its election promise which is part of its manifesto by the GPS (Gabungan Parti Sarawak) government for the 12th State Election and to prove that the GPS Government takes its promises and its manifesto seriously,” he said.
Based on Sarawak’s study, he gave assurance that the good governance attributes will be taken up and institutionalised in the establishment of Sarawak’s very own sovereign wealth fund.
The attributes include clear objective and purpose; relevant investment strategies to achieve objective; clearly-defined funding appropriation; independent and competent Board of Guardians supported by an Investment Advisory Panel; robust performance and risk management; restrictive withdrawal rules; and timely and transparent performance reporting. — DayakDaily
