By Jamie Lu
A STRONG financial position has convinced the Gabungan Parti Sarawak (GPS) government that it is time to put aside funds for future generations through a sovereign wealth fund.
In the last couple of months, Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg has travelled to Norway, Singapore and Britain to study their models of managing similar funds – with Sarawak’s approach to be tailored to the state’s economy.
“Sarawak’s financial position is quite strong now, so we want to generate revenue from future surplus funds for the benefit of our future generations.
“It is also my dream – to provide free tertiary education to our Sarawakian children should the state have sufficient revenue in the future (through the fund),” he said recently.
Meanwhile, studies have been done on the fund management and governance, investment strategies, legal and policy frameworks as part of its benchmarking process.
Sarawak is expected to table a Bill during the Sarawak Legislative Assembly (DUN) sitting in November 2022 to provide the legal framework for the formation of the state’s sovereign wealth fund.
Prof Geoffrey Williams from Malaysia University of Science and Technology previously told New Sarawak Tribune that a sovereign wealth fund is a state-owned investment fund run on behalf of the people, comprising money generated by the government, often derived from a country’s surplus reserves.
It usually obtained the seed money from commodity sales such as oil which is used to invest actively across a balanced portfolio of assets overseas as well as domestically.
“Oil resources would run out over the next few decades, Sarawak must retain as much revenue as possible for investments and income for the future,” he said.
Williams, who is also an economist, felt that the Sarawak sovereign wealth fund would provide a long-term resource for investments and the income from the fund could be used for social, environmental and economic development of the state.
“The idea to set up a Sarawak sovereign wealth fund is a very important initiative for the long-term development of the state.
“It can be used to provide pensions, investment to create jobs and incentives to protect environmental resources,” he added.
However, he said, there must be watertight governance to protect the fund as well as international standards for the fund under the Santiago Principles which deal with governance issues.
