Sarawak govt to inject initial RM8 billion to set up sovereign fund

Abang Johari tabling the Sarawak Sovereign Wealth Future Fund Board Bill, 2022 in the DUN sitting on Nov 22, 2022. Screenshot taken from Sarawak Public Communications Unit (Ukas) YouTube livestream.

By Nur Ashikin Louis

KUCHING, Nov 22: The Sarawak government will inject an initial allocation of RM8 billion in setting up the Sarawak Sovereign Wealth Future Fund.

Premier of Sarawak Datuk Patinggi Tan Sri Abang Johari Tun Openg said the money for the Fund will come from the State Consolidated Fund through appropriations approved via resolutions passed by the Sarawak Legislative Assembly (DUN).

“The Fund will comprise an initial, and subsequently, annual appropriations from the State Consolidated Fund. The amount of each annual appropriation would, therefore, be subject to the approval of this august House.

“The initial appropriation to the Fund will be at RM8 billion with subsequent annual appropriations of RM300 million annually from year two to year five; RM550 million annually from year six to year 10; and RM650 million annually from year 11 to year 20,” he said when tabling the Sarawak Sovereign Wealth Future Fund Board Bill, 2022 in the DUN sitting here today.

Abang Johari who is also the Minister for Finance and New Economy, further said these appropriations to the Fund will be disbursed into the Fund’s Investment Fund Account and be managed strictly in accordance with the Investment Mandate stated in Second Schedule of the Bill.

With the appropriation, he pointed out that the Fund is expected to grow sustainably with no withdrawals except in the case of critical events which might arise within this 20-year period or when the Fund performs better than targeted.

The Bill institutionalised strict requirements for withdrawal of monies from the Fund where specific provisions regulating withdrawals of monies are found in clause 8 of the Bill. There are also provisions for the re-investment of income or monies from the investments.

He also said that if the Fund performs better than targeted such that there is an excess income from the Fund above the thresholds set out in the Bill, the Board of Guardians – custodians of the Fund – may transfer the excess income to an Endowment Fund Account.

The monies in the Endowment Fund Account, which will be transferred to the State Consolidated Fund and held under a Trust Fund, can be utilised for education of Sarawakians in tertiary institutions or such other institutions as may be approved by the Sarawak cabinet; improvement of the standard of living of Sarawakians based on socio-economic needs; development of the talents, expertise, and the entrepreneurial skills of Sarawakians; and such other purposes as may be determined by the Sarawak cabinet in a notification to be published in the Gazette and laid before the DUN.

“The accounts of the Fund and the annual report of activities concerning the Fund will be laid before this august House in accordance with the Bill.

“There are also provisions in the Bill to regulate the expenditure of the Board of Guardians whose annual budgeting expenses will have to be approved by the Sarawak cabinet,” he added. — DayakDaily